Riot Platforms has modified its $200 million credit agreement with Coinbase Credit, as disclosed in an 8-K filing. The revised terms replace the variable interest rate with a fixed one, enhancing cost predictability as the company shifts its focus towards artificial intelligence and high-performance computing infrastructure, while simultaneously reducing its bitcoin holdings. As of Tuesday, the company's bitcoin reserves stood at 15,680, down from 19,368 at the start of the year, according to bitcoin treasuries.net.
The updated agreement retains the original loan amount and collateral structure, with the credit facility secured by Riot's bitcoin, USDC, and cash held in Coinbase Custody. However, the loan's maturity 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, which may necessitate additional collateral if bitcoin's price drops sharply, potentially leading to a continued depletion of Riot's treasury to fund its AI and HPC endeavors, especially if bitcoin's weakness persists. Riot's shares have declined by around 9% on Tuesday, falling below $17, with the company's Q1 earnings report scheduled for April 30.