Ethena, FalconX launch $1 billion USDe lending facility

Ethena and FalconX have launched a $1 billion secured lending facility that will use assets backing USDe to finance overcollateralized loans for institutional borrowers. Summary The $1 billion facility will direct part of USDe’s backing assets into secured institutional loans. FalconX will originate and service the loans through a special purpose vehicle. Qualified custodians will hold collateral valued above each borrower’s outstanding loan. Institutional lending accounted for $310 million, or 6.9%, of USDe backing in early July. How the $1 billion USDe facility will work FalconX and Ethena said the warehouse financing arrangement will give FalconX capital to extend secured loans to institutional clients for trading, corporate treasury operations, and payment-related services. Operating through a special purpose vehicle, FalconX will originate the loans, assess borrowers, service the credit, and manage the collateral. Qualified third-party custodians will hold the assets securing each position rather than leaving them under the borrower’s direct control. Borrowers must pledge assets worth more than the amount they receive, creating a buffer that FalconX can use if the collateral l...