Bitcoin-backed lending platform Ledn sold about $188 million in bonds tied to Bitcoin-backed consumer loans to the mainstream asset-backed securities (ABS) market, Bloomberg reported on Wednesday, citing people accustomed to the matter.
In a novel deal, one in every of the 2 tranches – the investment grade portion – was reportedly priced at a variety of about 335 basis points over a benchmark rate of interest, meaning investors would demand 3.35 percentage points of excess return to carry crypto-linked credit risks as a substitute of traditional consumer ABS.
The deal is structured by Ledn Issuer Trust 2026-1, which is able to securitize a pool of 5,441 short-term, fixed-rate balloon loans to 2,914 U.S. borrowers, secured by 4,078.87 Bitcoin (BTC) as collateral, in accordance with preliminary filings from S&P Global Ratings dated Feb. 9.
How structure and evaluations fit together
Balloon loans are structured with relatively small periodic payments and a big “balloon” lump sum payment at maturity, keeping short-term payments low but leaving a major amount of principal due at the tip.
S&P has assigned preliminary rankings of BBB- (sf) and B- (sf) to the $160 million senior Class A notes and $28 million subordinated Class B notes, respectively.
A BBB rating is the bottom level of investment grade bonds and reflects an affordable ability to satisfy financial obligations but can be more vulnerable to antagonistic conditions than higher rated bonds, while B- is within the deep non-investment grade “junk” range where the chance of default is significantly higher.
Jefferies Financial Group served as sole structurer and underwriter as a serious Wall Street trader brokered between institutional fixed income investors and this recent type of crypto-related exposure.
BTC is increasingly seen as a legitimate security
Bitwise head of research for Europe Andre Dragosch told Cointelegraph that the proven fact that Ledn was in a position to bundle these loans into a conventional ABS implies that BTC is “increasingly viewed by traditional financial institutions as a secure and bonafide security.”
As further evidence of this, he cited large banks resembling JPMorgan, which supply BTC-backed loans to their customers. “Bitcoin is increasingly being integrated into traditional finance as a brand new, pristine security,” he said.
Jinsol Bok, head of research at global crypto research firm Four Pillars, told Cointelegraph that this implies liquidity now not needs to stay locked up and “as a substitute will be expanded to recent loans,” adding that the dimensions of the BTC-collateralized loan market “could grow well beyond its current levels in the long run.”
He said that unlike real estate mortgages, BTC-collateralized loans will be transparently tracked on-chain and liquidated in a programmable manner. “For this reason, I consider that the risks related to ABS needn’t be unduly overstated on this context.”
What investors buy
Asset-backed securities are bonds funded by pools of loans, so investors in Ledn's notes do in a roundabout way own Bitcoin (BTC).
Instead, they assume credit and structural risk on a pool of BTC-backed loans, whose performance is dependent upon the borrower's repayments and the lender's ability to liquidate collateral during market stress.
“These loans generally have a low default rate because they have an inclination to have a low LTV [loan-to-value] Key figures and are well capitalized with BTC,” said Dragosch.
Ledn was founded in 2018 and says it has funded over $9.5 billion in loans in over 100 countries thus far. The company received a strategic investment from Tether, the issuer of the stablecoin USDt (USDT), in November 2025.
Strategic investment by Tether. Source: Ledn.
Cointelegraph reached out to Ledn for comment but didn’t receive a response on the time of publication.
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