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 development occurs as the company continues to decrease its bitcoin holdings and diversify into artificial intelligence and high-performance computing infrastructure.
As of Tuesday, Riot's bitcoin holdings stood at 15,680, down from 19,368 at the start of the year, according to bitcoin treasuries.net. The revised agreement maintains the loan size and collateral structure, with the loan 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 loan-to-value framework, where a sharp decline in bitcoin's price could trigger collateral top-ups, with a top-up threshold set at a 70% loan-to-value ratio and liquidation at 80%.
This could lead to further depletion of Riot's bitcoin treasury if the cryptocurrency's price continues to decline, potentially funding its pivot into AI and HPC. Riot's shares have fallen by approximately 9% to below $17 on Tuesday, with the company scheduled to report its Q1 earnings on April 30.