Riot Platforms has revised its $200 million credit agreement with Coinbase Credit, as disclosed in an 8-K filing, replacing a variable interest rate with a fixed one to enhance cost predictability, while continuing to decrease its bitcoin holdings. This change brings stability as Riot shifts its focus towards artificial intelligence and high-performance computing infrastructure, simultaneously reducing its bitcoin stash. 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 revised agreement maintains the same loan size and collateral structure, with Riot's bitcoin, USDC, and cash held with Coinbase Custody serving as security.
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 loan-to-value framework, which may trigger collateral top-ups if bitcoin's price drops significantly.
Under this framework, a top-up is required if the loan-to-value ratio exceeds 70%, and liquidation occurs at 80%. Consequently, Riot may continue to deplete its bitcoin reserves if the cryptocurrency's price remains weak, using the funds to support its pivot towards AI and HPC.
Riot's shares have fallen approximately 9% on Tuesday, dropping below $17, with the company scheduled to report its Q1 earnings on April 30.