Riot Platforms has modified its existing $200 million credit agreement with Coinbase Credit, as disclosed in a recent 8-K filing. This amendment replaces the variable interest rate with a fixed one, enhancing cost predictability as the company diversifies into artificial intelligence and high-performance computing infrastructure, while simultaneously reducing its bitcoin holdings. As of Tuesday, Riot's bitcoin reserves stood at 15,680 BTC, marking a decrease from the 19,368 BTC held at the beginning of the year, according to data from bitcoin treasuries.net.
The revised agreement maintains the original loan size and collateral structure, with Riot's bitcoin, USDC, and cash held with Coinbase Custody serving as security. However, the loan's maturity has been extended by 364 days, with the option to further extend it by a year, subject to lender approval.
The credit facility operates under a loan-to-value framework, which may necessitate additional collateral if bitcoin's price experiences a sharp decline. Specifically, the loan is subject to 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 reserves to support its pivot into AI and HPC if the cryptocurrency's price remains weak.
The company's shares have declined by approximately 9% to below $17 on Tuesday, with its Q1 earnings report scheduled for release on April 30.