Ledn Launches Groundbreaking Bitcoin-Backed Bond, Secures $188M
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In a significant move for the cryptocurrency lending sector, Ledn has successfully executed a pioneering bond sale that raised $188 million. This transaction marks the first instance of asset-backed securities (ABS) underpinned by bitcoin collateral.
These bonds were generated from a pool encompassing over 5,400 consumer loans, with each loan secured by bitcoin provided by the borrowers. According to reports, these loans have an average interest rate of 11.8%.
The bonds were structured in two segments, one of which received an investment-grade rating and was priced at 335 basis points above the benchmark rate. Jefferies took on the role of sole structuring agent and bookrunner for this historic deal.
Investors in these asset-backed securities can expect to receive payments derived from the cash flows produced by the loans. To mitigate risks associated with the volatility of bitcoin, Ledn implemented an automated liquidation process to safeguard investors during market downturns.
Bitcoin has experienced substantial fluctuations, with its price recently dropping around 50% in just four months, dipping to $60,000 at times. Despite this, the innovative structure of Ledn’s bonds aims to offer a degree of protection against such market shifts.
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