Riot Platforms has modified its $200 million credit facility agreement with Coinbase Credit, as disclosed in an 8-K filing, replacing the variable interest rate with a fixed rate to enhance cost predictability while continuing to decrease its bitcoin holdings. This strategic move offers greater financial stability as Riot transitions into artificial intelligence and high-performance computing infrastructure.
As of Tuesday, the company's bitcoin holdings stood at 15,680, down from 19,368 at the beginning of the year, according to bitcoin treasuries.net. The revised agreement maintains the same loan size and collateral structure, with the credit facility secured by Riot's bitcoin, USDC, and cash held with Coinbase Custody. However, the loan 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 loan-to-value framework, where a sharp decline in bitcoin's price could trigger collateral top-ups, with a potential liquidation threshold at 80%. Consequently, Riot may continue to deplete its bitcoin reserves if the cryptocurrency's price remains weak, potentially funding its pivot into AI and HPC.
The company's shares have declined by approximately 9% on Tuesday, falling below $17, with Q1 earnings scheduled for release on April 30.