Riot Platforms has revised its $200 million credit agreement with Coinbase Credit, replacing the variable interest rate with a fixed one to enhance cost predictability. This development comes as the company continues to divest its bitcoin holdings, with its reserve decreasing from 19,368 BTC at the beginning of the year to 15,680 BTC as of Tuesday, according to bitcoin treasuries.net. The company's pivot towards artificial intelligence and high-performance computing infrastructure is underway, with the fixed interest rate providing greater stability.
The loan's terms remain unchanged, with the credit facility secured by Riot's bitcoin, USDC, and cash held with Coinbase Custody. 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 loan operates under a tiered loan-to-value framework, where a top-up is triggered if the LTV ratio exceeds 70% and liquidation occurs at 80%. This framework may lead to continued depletion of Riot's bitcoin reserve if the cryptocurrency's price continues to decline, potentially funding the company's AI and HPC endeavors.
As of Tuesday, Riot's shares have declined by approximately 9% to below $17, with the company scheduled to report its Q1 earnings on April 30.