Ethena Allocates $310M to AAA CLOs, Citing 'More Stable Returns

Ethena has begun expanding into RWA (real-world asset) tokenization to boost yields and decouple from crypto market cycles. On Friday, the firm behind the yield-paying stablecoin USDe said the first asset category under evaluation is AAA CLOs, which sit at the top of the capital stack with a zero default rate at the AAA level across the asset class's entire history.

Collateralized Loan Obligations (CLOs) are pools of loans from individual companies handled by asset managers. Think of it as an ETF-style index, except instead of tracking stocks, CLOs track pooled corporate loans. Because nothing says "decentralized finance" like leaning on a 30-year-old structured credit product.

The AAA mark is the highest evaluation score rating firms like Moody's can place on such financial products. The rating means the product carries the lowest level of default risk and high credit quality.

Beyond credit quality, Ethena is seeking an RWA asset with high liquidity and a low downside profile. According to the team, CLOs — particularly the Janus Henderson Anemoy AAA CLO Fund — fit this criteria.

Notably, during periods of financial stress like the COVID-19 era and high Fed interest rates, the broader CLO sector only fell 8% and 2%, respectively. In both scenarios, the S&P 500 Index (SPY) and broader credit segment dropped 33% and 22%, respectively.

For a 5% drawdown, Ethena established that it took CLOs 5–8 days to bounce back. Compared to crypto, it's been about eight months since the Bitcoin contraction began, and the asset is now down 50% from its $126K peak.

For the unfamiliar, Ethena's USDe leverages crypto funding rates for yield returns. Higher funding rates during bull runs lead to higher yields. But bear markets compress funding rates and yield, too. This worsens when recovery takes longer.

That compression is part of why Ethena diversified reserve assets into RWA, starting with BlackRock's BUIDL, which leverages U.S. Treasury bonds.

Now, Ethena plans to expand RWA exposure and allocate $310 million to the Janus Henderson Anemoy AAA CLO Fund. According to the team, this will break the yield returns correlation with crypto market swings and would offer "more stable returns."

The team added that AAA CLO yields are driven by short-rate policy, credit-spread dynamics, and loan market structure — none of which are tied to crypto positioning or sentiment. RWA exposure, in other words, breaks that correlation.

The move comes after Ethena's recent partnerships with Coinbase and Brazil's largest exchange, Mercado Bitcoin. It remains unclear whether these efforts will boost demand for USDe, which has dropped sharply since last October.