Riot Platforms has modified its $200 million credit agreement with Coinbase Credit, as disclosed in an 8-K filing, replacing the variable interest rate with a fixed one to enhance cost predictability. This move comes as the company continues to divest its bitcoin holdings and shift focus towards artificial intelligence and high-performance computing infrastructure.
As of Tuesday, Riot's bitcoin holdings stood at 15,680, down from 19,368 at the beginning of the year, according to bitcoin treasuries.net. The revised agreement maintains the loan size and collateral structure, with the credit facility secured by Riot's bitcoin, USDC, and cash held with Coinbase Custody. The maturity date has been extended by 364 days, with the option to further extend it by a year, subject to lender approval. The loan operates under a tiered loan-to-value framework, where collateral top-ups are triggered if the loan-to-value ratio exceeds 70%, and liquidation occurs at 80%.
This framework poses a risk to Riot's treasury if bitcoin prices continue to decline, potentially forcing the company to deplete its reserves to fund its pivot into AI and HPC. Riot's shares have dropped approximately 9% to below $17, with the company scheduled to report its Q1 earnings on April 30.