Riot Platforms has revised its $200 million credit agreement with Coinbase Credit, as disclosed in an 8-K filing. The revision replaces the floating interest rate with a fixed rate, enhancing cost predictability as the company transitions into artificial intelligence and high-performance computing infrastructure, while also decreasing its bitcoin holdings. The adoption of a fixed interest rate provides Riot with greater financial stability as it expands into AI and HPC.
Concurrently, the company is reducing its bitcoin reserves, with its holdings decreasing to 15,680 BTC as of Tuesday, down from 19,368 BTC at the beginning of the year, according to data from bitcoin treasuries.net. The revised agreement retains 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 loan maturity has been extended by 364 days, with the option to extend it by an additional year, subject to lender approval. The loan operates under a loan-to-value framework, which may necessitate collateral top-ups if bitcoin's price experiences a sharp decline. The framework is tiered, with a top-up triggered if the LTV ratio exceeds 70% and liquidation occurring at 80%.
Consequently, Riot may continue to deplete its bitcoin reserves if the cryptocurrency's price remains weak, potentially funding its AI and HPC expansion. Riot's shares have declined by approximately 9% on Tuesday, falling below $17. The company is scheduled to release its Q1 earnings report on April 30.