coindesk.com
Riot Platforms (RIOT) has amended its $200 million credit facility with Coinbase Credit, according to an 8-K filing, which replaces a floating interest rate with a fixed rate, providing greater cost predictability, while the company continues to reduce its bitcoin holdings.
The shift to a fixed rate offers predictability as Riot pivots into artificial intelligence (AI) and high-performance computing (HPC) infrastructure. At the same time, the company is continuing to reduce its bitcoin stack. The company held 15,680 $BTC as of Tuesday, down from 19,368 $BTC at the start of the year, according to bitcoin treasuries.net.
The updated agreement shows that the loan size and collateral structure stays the same. Riot's bitcoin, USDC and cash held with Coinbase Custody secure the credit facility. But the maturity has been extended by 364 days, with an option to push it a further year subject to lender approval.
The loan operates under a loan-to-value (LTV) framework that can force collateral top-ups if bitcoin's price falls sharply. The loan operates under a tiered loan-to-value framework where, under normal conditions, a top-up is triggered if the LTV ratio exceeds 70% and liquidation kicks in at 80%.
Therefore Riot could continue to deplete its treasury if bitcoin continues to show weakness and fund its AI/HPC pivot
Riot shares are down around 9% Tuesday to below $17. The company reports Q1 earnings on April 30.