Riot Platforms has revised its $200 million credit agreement with Coinbase Credit, as disclosed in an 8-K filing. The revised terms replace a variable interest rate with a fixed rate, providing greater predictability of costs, as the company continues to decrease its bitcoin holdings. This shift to a fixed rate offers greater stability as Riot transitions into artificial intelligence and high-performance computing infrastructure, while simultaneously reducing its bitcoin reserves. As of Tuesday, the company's bitcoin holdings stood at 15,680, down from 19,368 at the start of the year, according to bitcoin treasuries.net.
The updated 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 further extend it by a year, subject to lender approval.
The loan operates under a tiered loan-to-value framework, where a top-up is triggered if the loan-to-value ratio exceeds 70%, and liquidation occurs at 80%. Consequently, Riot may continue to deplete its bitcoin treasury if the cryptocurrency's price continues to decline, using the funds to support its pivot into AI and HPC.
Riot's shares have fallen by approximately 9% on Tuesday, to below $17, with the company's Q1 earnings report scheduled for April 30.