The Bitcoin lender reportedly packaged thousands of Bitcoin-backed consumer loans into rated bonds, giving investors a new way to take crypto‑linked risk without holding BTC.
Bitcoin-backed loan platform Ledn sold about $188 million of bonds tied to Bitcoin‑collateralized consumer loans into the mainstream asset‑backed securities (ABS) market, Bloomberg reported on Wednesday, citing people familiar with the matter.
In a first-of-its-kind deal, one of the two tranches — the investment‑grade portion – was reportedly priced at a spread of about 335 basis points over a benchmark rate, implying that investors are demanding 3.35 percentage points in extra yield to hold crypto‑linked credit risk rather than conventional consumer ABS.
The deal is structured through Ledn Issuer Trust 2026‑1, which securitizes a pool of 5,441 short‑term, fixed‑rate balloon loans extended to 2,914 US borrowers, backed by Bitcoin held as collateral, according to S&P Global Ratings’ preliminary documentation on Feb. 9.
Ledn CEO and founder Adam Reeds told Cointelegraph that unlocking the ABS market created a “direct pipeline between Bitcoin holders seeking liquidity and the world’s deepest pools of institutional capital,” and that it was a “certainty” that Bitcoin‑backed loan securitizations would evolve into their own asset class.
How the structure and ratings stack up
Balloon loans are structured with relatively small periodic payments and a large lump‑sum “balloon” payment at maturity, which keeps near‑term payments low but leaves a sizeable principal balance due at the end.
S&P assigned preliminary BBB‑ (sf) and B‑ (sf) ratings to the $160 million senior Class A notes and $28 million subordinated Class B notes, respectively.
A BBB- rating is the lowest tier of investment-grade debt, reflecting an adequate capacity to meet financial commitments but higher vulnerability to adverse conditions than higher‑rated bonds, while B‑ sits in deep non‑investment‑grade “junk” territory, where default risk is materially higher.
Reeds said that the rating was “entirely expected” for a “first-of-its-kind transaction in a new asset class,” and that investors were still building their models around Bitcoin-collateralized risk.
Jefferies Financial Group acted as the sole structuring agent and bookrunner, as a major Wall Street dealer intermediated between institutional fixed‑income investors and this new form of crypto‑linked exposure.
BTC increasingly seen as legitimate collateral
Bitwise head of research Europe, Andre Dragosch, told Cointelegraph that the fact that Ledn was able to package these loans into a traditional ABS implied that BTC is “increasingly seen as safe and legit collateral by traditional financial institutions.”
He highlighted major banks like JPMorgan offering BTC-backed loans to customers as a further indication of this. “Bitcoin is increasingly being integrated into traditional finance as the new pristine collateral,” he said.
Jinsol Bok, research lead at Four Pillars global crypto research company, told Cointelegraph that this means liquidity no longer needs to remain locked up and “can instead be expanded into new lending,” adding that the size of the BTC-collateralized lending market could “grow far beyond its current level in the future.”
Reeds said that it was a “significant milestone” and proof of the company’s business model, high standards and conviction.
What investors are buying
Asset‑backed securities are bonds funded by pools of loans, so investors in Ledn’s notes do not own Bitcoin directly.
Instead, they take on credit and structural risk to a pool of BTC‑secured loans whose performance depends on borrower repayments and the lender’s ability to liquidate collateral during market stress.
“These loans generally have a low default rate because they tend to have low LTV [loan-to-value] ratios and are well capitalized with BTC,” Dragosch said.
Reeds said that February’s volatility was “a major stress test” for Ledn, but that the liquidation engine “performed exactly as designed,” and that “crucially, S&P did not downgrade the rating and the deal closed as planned.”
He said that larger drawdowns did, unfortunately, result in liquidations, but that clients with auto top-up enabled “fare significantly better,” and that every loan that gets liquidated “generates sufficient proceeds to repay the lender in full.”
Founded in 2018, Ledn says it has funded over $9.5 billion in loans so far in over 100 countries. The company received a strategic investment from Tether, the issuer of the USDt stablecoin, in November 2025.
