Riot Platforms has modified its $200 million credit agreement with Coinbase Credit, as disclosed in an 8-K filing. This revision replaces the variable interest rate with a fixed one, enhancing cost predictability as the company transitions into artificial intelligence and high-performance computing infrastructure while continuing to decrease its bitcoin holdings. The adoption of a fixed interest rate brings stability as Riot expands into AI and HPC. Concurrently, the company is selling off its bitcoin reserves.
As of Tuesday, Riot held 15,680 BTC, a decrease from the 19,368 BTC it held at the start of the year, according to bitcoin treasuries.net. The revised agreement retains the same loan amount 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 prolong it by an additional year, subject to lender approval.
The loan operates within a loan-to-value framework, which may necessitate additional collateral if bitcoin's price experiences a sharp decline. The loan is structured under a tiered LTV framework, where, under normal circumstances, a top-up is triggered if the LTV ratio exceeds 70%, and liquidation occurs at 80%. Consequently, Riot may continue to deplete its bitcoin reserves if the cryptocurrency's price continues to weaken, thereby funding 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.