Riot Platforms has revised its credit agreement with Coinbase Credit, as disclosed in an 8-K filing, replacing the variable interest rate with a fixed one to enhance cost predictability as the company transitions into AI and high-performance computing infrastructure while continuing to decrease its bitcoin reserves. The adoption of a fixed interest rate provides stability as Riot expands into AI and HPC.
Concurrently, the company persists in reducing its bitcoin holdings, with its treasury decreasing to 15,680 BTC as of Tuesday from 19,368 BTC at the start of the year, according to bitcoin treasuries.net. The revised agreement maintains the loan amount and collateral structure, with the credit facility secured by Riot's bitcoin, USDC, and cash held with Coinbase Custody. The loan maturity has been extended by 364 days, with the option to extend further by a year, subject to lender approval.
The loan operates under a loan-to-value framework, which may necessitate additional collateral if bitcoin's price experiences a sharp decline. The loan is subject to a tiered LTV framework, where under normal circumstances, a top-up is triggered if the LTV ratio exceeds 70%, and liquidation occurs at 80%. Consequently, Riot may continue to deplete its treasury if bitcoin prices remain weak, thereby funding its AI and HPC expansion.
Riot's shares have declined by approximately 9% on Tuesday, falling below $17. The company is scheduled to report its Q1 earnings on April 30.