Riot Platforms has modified its $200 million credit agreement with Coinbase Credit, as disclosed in an 8-K filing. The revision replaces a variable interest rate with a fixed one, enhancing cost predictability as the company transitions into artificial intelligence and high-performance computing infrastructure, while also reducing its bitcoin holdings.
The adoption of a fixed interest rate provides stability as Riot expands into AI and HPC. Concurrently, the company continues to decrease its bitcoin holdings, with its reserves standing at 15,680 BTC as of Tuesday, down from 19,368 BTC at the beginning of the year, according to bitcoin treasuries.net.
The revised agreement maintains the same loan size and collateral structure, with Riot's bitcoin, USDC, and cash held with Coinbase Custody serving as security for the credit facility. However, the maturity date 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 loan-to-value framework, which may necessitate additional collateral if bitcoin's price declines significantly.
The framework includes a tiered system, where under normal circumstances, a top-up is triggered if the LTV ratio exceeds 70%, and liquidation occurs at 80%. As a result, Riot may continue to deplete its bitcoin reserves if the cryptocurrency's price remains weak, using the funds to support its pivot into AI and HPC.
Riot's shares have declined by approximately 9% on Tuesday, falling below $17. The company is scheduled to release its Q1 earnings on April 30.