Riot Platforms has modified its $200 million credit agreement with Coinbase Credit, as disclosed in an 8-K filing. The revision replaces 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 also decreasing its bitcoin holdings.
The adoption of a fixed interest rate provides Riot with greater financial certainty as it diversifies into AI and HPC. Meanwhile, the company continues to sell off its bitcoin reserves.
As of Tuesday, Riot held 15,680 BTC, down from the 19,368 BTC it had at the beginning of the year, according to data from bitcoin treasuries.net. The revised agreement retains the same loan size and collateral structure, with the credit facility secured by Riot's bitcoin, USDC, and cash stored with Coinbase Custody.
However, the maturity date has been extended by 364 days, with the option to prolong it by an additional year, subject to lender approval. The loan is subject to a loan-to-value framework, which may require Riot to provide additional collateral if bitcoin's price drops significantly. The framework includes a tiered system, where a collateral top-up is triggered if the LTV ratio exceeds 70%, and liquidation occurs at 80%. As a result, if bitcoin prices continue to decline, Riot may need to further deplete its bitcoin reserves to support its pivot towards AI and HPC.
Riot's shares have fallen by approximately 9% on Tuesday, to below $17. The company is scheduled to release its Q1 earnings on April 30.