Ledn, a prominent crypto lending firm, has successfully raised $188 million through the issuance of asset-backed securities (ABS) backed by bitcoin collateral. This marks a significant first for the crypto credit markets.
The bonds are secured by a pool of over 5,400 consumer loans issued by Ledn, with each loan collateralized by borrowers' bitcoin holdings. These loans carry a weighted average interest rate of 11.8%.
The issuance includes an investment-grade tranche, which was priced at 335 basis points over the benchmark rate. Jefferies acted as the sole structuring agent and bookrunner for the deal.
This innovative structure incorporates automated liquidation of bitcoin collateral when predefined thresholds are breached. This mechanism is designed to protect investors against sharp market downturns, even amidst significant price volatility in cryptocurrencies like bitcoin.