Bitcoin-backed lending platform Ledn sold about $188 million worth of bonds tied to bitcoin-backed consumer loans on the main asset-backed securities (ABS) market, Bloomberg reported on Wednesday, citing people familiar with the matter.
The first transaction of its kind involved the employ of one of two tranches – the investment grade part apparently priced at a spread of approximately 335 basis points over the benchmark rate, meaning investors are demanding 3.35 percentage points of additional yield to maintain the credit risk associated with cryptocurrencies rather than conventional consumer ABS.
The transaction is conducted through Ledn Issuer Trust 2026-1, which securitizes a pool of 5,441 short-term fixed-rate balloon loans to 2,914 borrowers in the US, secured by 4,078.87 Bitcoin (BTC) as collateral, According to to S&P Global Ratings’ preliminary filing dated February 9.
How the structure and assessments are arranged
Balloon loans feature relatively compact periodic payments and a vast lump sum “balloon” payment at maturity, which keeps short-term payments low but leaves a significant principal balance at the end.
S&P has assigned preliminary ratings of BBB- (sf) and B- (sf) to the $160 million Class A senior notes and $28 million Class B subordinated notes, respectively.
Related: A $25 Billion Crypto Lending Market Currently Led by “Transparent” Players: Galaxy
A BBB rating is the lowest level of investment-grade debt, reflecting adequate ability to meet financial obligations but greater vulnerability to adverse conditions than higher-rated bonds, while B – is deep in “junk” non-investment-grade territory, where the risk of default is much higher.
Jefferies Financial Group acted as sole structuring and bookrunning agent, as the primary Wall Street dealer intermediating between institutional fixed income investors and this up-to-date form of cryptocurrency-related exposure.
BTC is increasingly perceived as legal security
Bitwise’s head of research in Europe, Andre Dragosch, told Cointelegraph that the fact that Ledn was able to package these loans into classic ABS means that BTC is “increasingly viewed by traditional financial institutions as a safe and legal security.”
As further evidence of this, he highlighted vast banks such as JPMorgan offering BTC-secured loans to customers. “Bitcoin is increasingly being integrated into traditional finance as a new, pristine security,” he said.
Jinsol Bok, head of research at global cryptocurrency research firm Four Pillars, told Cointelegraph that this means liquidity no longer needs to be locked in and “can instead be expanded to new credits,” adding that the size of the BTC-backed credit market could “significantly exceed its current level in the future.”
Related: Anchorage – Mezo partnership opens institutional access to BTC-collateralized loans
Unlike real estate mortgages, BTC-backed loans can be transparently tracked on-chain and liquidated in a programmable way, he said. “For this reason, I believe that the risks associated with ABS in this context need not be unduly overestimated.”
What investors are buying
Asset-backed securities are bonds financed by pools of loans, so investors investing in Ledn bonds do not directly own Bitcoin (BTC).
Instead, they assume credit and structural risk on a pool of BTC-collateralized loans, the performance of which depends on borrower repayments and the lender’s ability to liquidate the collateral during times of market stress.
“These loans tend to have a low default rate because they tend to have a low LTV [loan-to-value] indicators and are well capitalized in BTC,” Dragosch said.
Founded in 2018, Ledn says it has already raised more than enough funding $9.5 billion in loans so far in over 100 countries. The company received a strategic investment from Tether, the issuer of the USDt (USDT) stablecoin, in November 2025.
Cointelegraph reached out to Ledn for comment but had not received a response by press time.
Big questions: Should you sell your Bitcoin for nickels for a 43% profit?
