Ledn has completed what Bloomberg described as the first asset-backed securities (ABS) transaction backed by bitcoin collateral, raising $188 million for crypto credit markets.
How the deal was structured
Asset-backed securities are bonds backed by pools of underlying loans, with investors receiving payments from the cash flows generated by those loans.
Bloomberg reported the bonds are secured by a pool of more than 5,400 consumer loans issued by Ledn, each backed by borrowers’ bitcoin holdings.
The loans carried a weighted average interest rate of 11.8%.
Pricing and participants
The deal included two tranches.
The investment-grade portion was priced at 335 basis points over the benchmark rate.
Jefferies served as sole structuring agent and bookrunner, according to Bloomberg.
Volatility and investor protections
Bitcoin’s volatility has been in focus, with the asset falling as much as 50% over the past four months to as low as $60,000, according to the report.
The structure uses automated collateral liquidation when thresholds are breached, a feature designed to protect ABS investors during sharp market declines.
A post summarizing the deal on X said:
“Crypto firm Ledn sells Bitcoin-backed bonds in ABS market first. Secured by pool of 5,400 Bitcoin-collateralized loans that consumers took from Ledn at weighted avg rate of 11.8%. Investment grade tranche priced at +335bps”
