Riot Platforms has modified its $200 million credit facility with Coinbase Credit, as disclosed in an 8-K filing, replacing a variable interest rate with a fixed rate to enhance cost predictability. This development occurs as the company continues to decrease its bitcoin holdings and diversify into artificial intelligence and high-performance computing infrastructure. As of Tuesday, Riot held 15,680 BTC, marking a decline from the 19,368 BTC it held 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. 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 necessitate collateral top-ups if bitcoin's price experiences a sharp decline. Under this framework, 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 reserve if the cryptocurrency's price continues to weaken, potentially funding its pivot into AI and HPC. On Tuesday, Riot's shares declined by approximately 9% to below $17, with the company scheduled to report its Q1 earnings on April 30.