In a recent regulatory filing, Riot Platforms announced an amendment to its $200 million credit agreement with Coinbase Credit. The revised terms replace the variable interest rate with a fixed rate, providing greater financial predictability for the company as it diversifies into artificial intelligence and high-performance computing infrastructure. However, this shift comes as Riot continues to decrease its bitcoin holdings, with its treasury dropping to 15,680 BTC as of Tuesday, down from 19,368 BTC at the beginning of the year, according to data from bitcoin treasuries.net.
The updated credit facility maintains the same loan size and collateral structure, with Riot's bitcoin, USDC, and cash held with Coinbase Custody serving as security. The loan's maturity has been extended by approximately one year, with the option for a further one-year extension subject to lender approval. The agreement operates under a tiered loan-to-value framework, where a collateral top-up is triggered if the loan-to-value ratio exceeds 70%, and liquidation occurs at 80%. This framework poses a risk for Riot, as continued bitcoin price weakness could lead to further depletion of its treasury to meet the loan's requirements, potentially impacting its ability to fund its strategic pivot into AI and HPC.
As of Tuesday, Riot's shares have declined by around 9% to below $17, with the company scheduled to report its Q1 earnings on April 30.