Key Takeaways
- Neuberger Berman’s $230 billion fixed-income platform supports a new tokenized high-yield fund that Securitize wants Aave Horizon to approve as collateral.
- If approved, holders of HINC could pledge the fund without selling it and borrow USDC, GHO or Ripple’s RLUSD against their position.
- HINC would bring sub-investment-grade corporate credit into Horizon, raising new questions around liquidation, credit risk and how far Aave should move beyond tokenized Treasuries.
A $230 billion fixed-income operation is moving deeper into DeFi, but its latest product must first convince Aave governance that high-yield corporate debt belongs alongside tokenized Treasuries as collateral.
Securitize submitted a proposal on Aug. 18 to add HINC, the Neuberger Securitize High Income Tokenized Fund, to Aave Horizon on Ethereum.
If approved, HINC would be accepted as supply-only collateral, allowing eligible holders to borrow USDC, GHO and RLUSD against it.
Tokenization Momentum Is Growing
The proposal arrived the same day Securitize formally launched HINC with Neuberger Berman as subadvisor.
Neuberger’s fixed-income platform oversees more than $230 billion, while the wider investment manager had $613 billion in total assets under management as of June 30.
HINC is available across Ethereum, Solana, Avalanche, and Sui and primarily invests in high-yield bonds, collateralized loan obligations, and leveraged loans.
Access is limited to eligible accredited investors and qualified purchasers who complete KYC and AML checks.
Why HINC Changes Aave’s RWA Collateral Mix
Aave Horizon already allows qualified institutions to borrow stablecoins against tokenized securities. Its collateral base has largely centered on assets such as tokenized Treasuries and money market products, including VanEck’s VBILL.
HINC would push that model into riskier territory.
Securitize describes it as Horizon’s first sub-investment-grade credit collateral.
Unlike Treasury products, whose yields may be near stablecoin borrowing costs, HINC is designed to generate higher returns, potentially allowing investors to borrow stablecoins while maintaining exposure to the underlying credit portfolio.
One possible use is straightforward: an institution owns HINC but needs cash. Instead of redeeming the fund, it could pledge the tokenized shares to Aave Horizon and borrow RLUSD, USDC or GHO, keeping the fixed-income position intact.
Horizon follows that exact model, providing institutions with liquidity against tokenized assets without requiring them to sell.
There is also a more aggressive possibility. The proposal says eligible users could independently borrow stablecoins against HINC. They can then use the proceeds to subscribe for additional fund shares, effectively creating a leveraged carry trade.
The Yield Comes With a Bigger Liquidation Problem
That higher yield also introduces risks that Treasury collateral does not carry to the same degree.
Securitize’s illustrative portfolio model produced a 7.21% annualized return between 2016 and 2026. However, its worst month was an 18% decline during March 2020.
A 400-basis-point widening in credit spreads could theoretically knock between 14% and 18% off NAV. These figures reflect portfolio modeling rather than HINC’s actual performance because the fund only recently launched.
Liquidations are another complication. HINC can only move between approved wallets, meaning Aave cannot simply sell collateral to any bidder during stress.
Securitize says it must onboard at least one KYB-approved liquidator with committed stablecoin capacity before launch and aims to add a second independent liquidator before raising the limits.
The proposal also warns that the fund could delay or suspend redemptions during severe market stress.
And HINC is not yet approved on Aave. The Aug. 18 filing is an ARFC, an early governance stage. It still requires technical and risk assessments, liquidator onboarding, a governance Snapshot and ultimately an Aave Improvement Proposal before going live.
The bigger experiment is whether DeFi lending can move beyond tokenized cash-like assets and safely treat actively managed corporate credit as reusable collateral. With Neuberger’s $230 billion fixed-income platform now behind one such product, Aave governance is about to test that boundary.
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The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Giuseppe Ciccomascolo began his career as an investigative journalist in Italy, where he contributed to both local and national newspapers, focusing on various financial sectors.
Upon relocating to London, he worked as an analyst for Fitch's CapitalStructure and later as a Senior Reporter for Alliance News. In 2017, Giuseppe transitioned to covering cryptocurrency-related news, producing documentaries and articles on Bitcoin and other emerging digital currencies. He also played a pivotal role in establishing the academy for a cryptocurrency exchange website. Crypto remained his primary area of interest throughout his tenure as a writer for ThirdFloor.
