PARIS & BOSTON–(BUSINESS WIRE)–#ABL—Atlendis Labs and Cicada Partners announced the launch of Asset-Backed Lines of Credit (ABLOC) to Fluna, a U.S.-based Trade Finance-focused Fintech. This milestone marks the official launch of the Private Asset-Backed Strategy following the strategic partnership announcement in November.
Continued Collaboration With Fluna Under Innovative Financing Structure
Fluna is an established borrower on the Atlendis DeFi protocol, and has successfully borrowed and repaid a total of 1.7 million in USDC over five loan cycles since onboarding in March 2023. Fluna’s success on the protocol serves as a compelling use case for web2 enterprises accessing capital markets on-chain to fulfill their working capital needs.
In the newly structured facility, financing will take the form of an Asset-Backed Line of Credit with a borrowing base of eligible trade finance receivables, ringed-fenced in Fluna SPV LLC, a Special Purpose Vehicle (“SPV”). “While Fluna’s strong on-chain track record is anticipated to continue attracting LP capital, the new ABL structure not only provides more flexibility to scale over time, but also strengthens the risk-adjusted return profile for lenders,” commented Miguel Sousa Dias, CEO of Fluna.
Fluna’s new credit facility will leverage the latest version of Atlendis’ DeFi Protocol, enhancing both flexibility and efficiency. New features allow borrowers to seamlessly roll loan cycles, ensuring flexibility for borrowers and uninterrupted yields for lenders. Fluna will also take advantage of the ancillary on- and off-ramp services provided by Atlendis Flow, an AMF and ACPR (respectively France’s Financial Market and Prudential Authorities) registered Digital Assets Services Provider (DASP).
The borrower will be Fluna SPV LLC, a Delaware LLC. The use of proceeds will support Fluna’s fast-growing trade finance platform, serving mid-market African exporters and developed-market importers. The line of credit will be made available to non-US lenders starting December 12th, 2023, with an initial tenor and capacity of 180 days and 750,000 USDC, respectively, subject to further growth in the borrowing base. Cicada Partners will serve as the administrative agent, with access to real-time monitoring of the asset base, and step-in rights in the event of default.
Asset-Backed Lines of Credit – A Defensive Growth Strategy
Utilizing the protocol-driven operational efficiency and accessibility, the Atlendis x Cicada offering is designed to address the unique challenges faced by lower middle markets, particularly the difficulty in accessing bank financing to support growth.
“Compared to the previous structure where the corporate served as the legal obligor, our new arrangement draws on the advantages of the traditional securitization framework, collateralizing the loan with a portfolio of diversified assets in an SPV and subjecting the assets to eligible criteria, robust portfolio covenants, and comprehensive legal recourse,” said Sefton Kincaid, the CEO and co-founder of Cicada Partners.
Finally, the joint offering is specifically designed to provide exposure to short-duration private credit via self-liquidating collateral.
A Unified Vision for the Future of DeFi Lending
While working intensively on the second version of Atlendis’ protocol, Atlendis and Cicada have dedicated the past few months to developing the strategy and building out a scalable underwriting framework, bringing together structuring, underwriting, and technical expertise.
“This collaboration is more than the sum of its parts, it’s a joint endeavor aimed at merging traditional financial principles with blockchain technology to apply DeFi lending to real-world use cases. The partners are committed to providing secure and accessible financial products in the DeFi space,” said Alexis Masseron, Co-Founder & CEO of Atlendis Labs.
Legal Disclaimer: This document is for information purposes only and is not intended to constitute financial, investment, accounting, legal or any other advice. Crypto lending comes with associated levels of risk depending on the DeFi apps and protocols used and the types of digital assets involved. It is recommended to seek professional advice from a legal and/or financial advisor.