Riot Platforms has modified its $200 million credit agreement with Coinbase Credit, switching from a variable to a fixed interest rate, as disclosed in an 8-K filing. This change provides greater predictability in borrowing costs as the company shifts its focus towards artificial intelligence and high-performance computing infrastructure, while also decreasing its bitcoin reserves. As of Tuesday, Riot held 15,680 BTC, down from 19,368 BTC 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 extend it by an additional year, subject to lender approval. The loan operates under a loan-to-value framework, where top-ups are required if the LTV ratio exceeds 70%, and liquidation occurs at 80%.
Consequently, if bitcoin prices continue to decline, Riot may need to further deplete its bitcoin treasury to meet these requirements, potentially funding its pivot into AI and HPC. The company's shares have dropped by around 9% to below $17 on Tuesday, with Q1 earnings scheduled for release on April 30.