Riot Platforms has revised its $200 million credit agreement with Coinbase Credit, replacing the variable interest rate with a fixed one, as disclosed in an 8-K filing. This change provides greater predictability in borrowing costs, coinciding with the company's strategic shift towards artificial intelligence and high-performance computing infrastructure, while also reducing its bitcoin holdings. As of Tuesday, Riot's bitcoin holdings stood at 15,680, down from 19,368 at the beginning of the year, according to bitcoin treasuries.net. The revised agreement maintains the same loan size and collateral structure, with the loan secured by Riot's bitcoin, USDC, and cash held with Coinbase Custody.
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 tiered loan-to-value framework, where a top-up is triggered if the loan-to-value ratio exceeds 70%, and liquidation occurs at 80%. This framework poses a challenge for Riot, as a significant decline in bitcoin's price could lead to further depletion of its treasury, potentially affecting its ability to fund its pivot towards AI and HPC. Meanwhile, Riot's shares have declined by around 9% on Tuesday, falling below $17, ahead of the company's Q1 earnings report on April 30.