Ledn raises $188M with first bitcoin-backed ABS sale

Ledn, a crypto lending company, completed the first asset-backed securities deal backed by bitcoin collateral, raising $188 million for crypto credit markets. Asset-backed securities are bonds backed by pools of underlying loans, with investors receiving payments from the cash flows generated by those loans.

The bonds are secured by a pool of more than 5,400 consumer loans issued by the firm, each backed by borrowers' bitcoin holdings. The loans carry a weighted average interest rate of 11.8%.

The transaction includes two tranches, with the investment-grade portion priced at 335 basis points over the benchmark rate. Jefferies served as sole structuring agent and bookrunner.

The structure employs automated collateral liquidation when thresholds are breached, a feature designed to protect investors during sharp market declines. Bitcoin's volatility has been in focus, with the largest cryptocurrency falling as much as 50% over the past four months to as low as $60,000.

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