Crypto lender Ledn Inc. has sold $188 million in securitized bonds backed by Bitcoin-linked loans, marking a first-of-its-kind deal in the asset-backed debt market.
The deal includes two bond tranches, according to Bloomberg, one of which was given an investment-grade rating and priced at a spread of 335 basis points above the benchmark rate, according to people familiar with the matter. Jefferies Financial Group Inc. acted as the sole structuring agent and bookrunner.
The bonds are secured by a pool of more than 5,400 consumer loans issued by Ledn, where borrowers used their Bitcoin holdings as collateral, according to an S&P Global Ratings report.
The loans have a weighted average interest rate of 11.8%.
Bitcoin’s price volatility remains a key risk. Loans linked to the cryptocurrency may go underwater if prices fall sharply.
S&P’s Ledn bitcoin bond ratings
S&P said investors may be partially protected because Ledn uses algorithmic liquidation to sell Bitcoin security when a default trigger is reached and uses the proceeds to repay outstanding loans.
The report noted that bitcoin’s sharp decline in early February forced Ledn to liquidate a “significant share” of loans planned for the deal. S&P said all liquidations were executed below an LTV threshold of 81.4%, shifting the portfolio composition toward fewer loans and more cash in the financing account, while keeping the total collateral package at $200 million.
S&P’s analysis focused on borrower default behavior, recovery rates during liquidation and concentration risk. The agency said margin-driven defaults represent the most acute stress scenario because liquidations occur when bitcoin prices fall, potentially to thin or volatile markets where execution steps matter most.
Because Ledn underwrites loans primarily based on bitcoin collateral rather than borrower credit profiles, S&P said traditional performance metrics for consumer loans are limited.
At the ‘A’ stress level, the agency applied a conservative 100% default assumption with modeled stresses for the rated notes, including a 79% default rate and 68% recovery for the BBB Class A tranche.
S&P highlighted structural mitigating factors including overcollateralization, early amortization triggers, a liquidity reserve funded at 5% of the note balance and Ledn’s automated liquidation engine, which it said has successfully liquidated 7,493 loans over seven years without a principal loss.
Ledn plans to require cash interest payments for renewals starting in 2027, which S&P said reduces liquidity stress over time.
Bitcoin has since recovered modestly, but remains about 46% below its October high, trading near $66,000 today.