Ledn Inc., a cryptocurrency lending company, has successfully issued $188 million worth of securitized bonds backed by loans secured with Bitcoin, marking an unprecedented milestone in the asset-backed debt sector.
The deal comprises two distinct bond tranches. According to Bloomberg sources familiar with the transaction, one tranche earned an investment-grade rating and was priced at a spread of 335 basis points above the benchmark interest rate. Jefferies Financial Group Inc. acted as both the sole structuring agent and bookrunner for this issuance.
These bonds are collateralized by a portfolio containing over 5,400 consumer loans extended by Ledn, where borrowers pledged their Bitcoin holdings as security. This information is detailed in a report from S&P Global Ratings.
The average interest rate across these loans stands at 11.8%, reflecting the risk profile associated with crypto-backed lending.
A significant risk factor remains Bitcoin’s price volatility; sharp declines can push loan values underwater since they are directly tied to cryptocurrency prices.
BREAKING: Ledn has sold $188 million in securitized bonds backed by Bitcoin assets — representing the first-ever BTC-linked deal within asset-backed debt markets — Bloomberg
— Bitcoin Magazine (@BitcoinMagazine) February 18, 2026
S&P’s Evaluation of Ledn’s Bitcoin-Backed Bonds
S&P noted that investors benefit from partial protection because Ledn employs algorithmic liquidation mechanisms that automatically sell off Bitcoin collateral once default triggers occur, using those proceeds to repay outstanding debts.
The rating agency highlighted that during February’s steep bitcoin price drop, Ledn had to liquidate a substantial portion of loans intended for this bond issuance. All liquidations were conducted below an 81.4% loan-to-value (LTV) threshold which resulted in fewer active loans and increased cash reserves within funding accounts while maintaining total collateral around $200 million.
S&P’s assessment focused on factors such as borrower default patterns, recovery rates during liquidation events, and concentration risks inherent in such portfolios. They emphasized margin-driven defaults as posing significant stress since liquidations happen amid falling bitcoin prices—often within thin or volatile markets where execution slippage is critical.
Given that Ledn primarily underwrites based on bitcoin collateral rather than traditional creditworthiness metrics of borrowers, conventional consumer loan performance indicators have limited applicability here according to S&P analysis.
Under severe stress scenarios labeled ‘A’ level stress tests by S&P included assumptions like complete (100%) defaults along with modeled stresses showing up to 79% default rates paired with roughly 68% recoveries for BBB- rated class A notes.
The report also pointed out structural safeguards such as overcollateralization measures, early amortization triggers designed to protect noteholders’ interests proactively, liquidity reserves funded at five percent of note balances plus Ledn’s automated liquidation system—which has historically managed successful liquidations totaling nearly seven thousand loans over seven years without principal losses recorded.
Looking ahead toward sustainability improvements starting from renewals in 2027 led through mandatory cash interest payments will help alleviate liquidity pressures gradually according to S&P forecasts.
Although bitcoin prices have rebounded somewhat recently after previous dips—they still trade approximately forty-six percent below their peak levels reached last October—hovering near sixty-six thousand dollars currently on market exchanges today.
This article titled “Ledn Issues $188 Million In Bonds Secured By Bitcoin Loans: A Groundbreaking Transaction”, originally appeared on Bitcoin Magazine, authored by Micah Zimmerman.