Riot Platforms has modified its $200 million credit agreement with Coinbase Credit, as disclosed in an 8-K filing, switching from a variable to a fixed interest rate to enhance cost predictability. This development occurs as the company reduces its bitcoin holdings and shifts 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 start of the year, according to bitcoin treasuries.net.
The revised agreement maintains the original 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 364 days, with the option to extend it further by a year, subject to lender approval. The loan 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 may lead to further depletion of Riot's bitcoin reserve if the cryptocurrency's price continues to decline, potentially funding its pivot towards AI and HPC.
On Tuesday, Riot's shares fell by approximately 9% to below $17, with the company scheduled to report its Q1 earnings on April 30.