This is a guest post from Noon

Most stablecoin protocols generate yield the same way: DeFi lending markets, liquid staking, or tokenized treasuries. These work fine when markets are calm. When they're not, the yields compress, the correlations spike, and you realize that half your yield sources were moving together the whole time.

Noon takes a different approach. And to understand why we deploy into private credit, you need to understand what we're trying to build first.

Noon Capital is the protocol behind USN and sUSN. USN is a USD-pegged stablecoin. sUSN is the yield-bearing version, you deposit USN, and sUSN accrues value over time as the protocol generates returns on the collateral backing it.

The collateral isn't sitting idle. Noon deploys it across a range of yield strategies, on-chain and off-chain, through an automatic allocator that continuously monitors market conditions and shifts capital toward the best risk-adjusted opportunities available. Noon chases the highest yield relative to risk, prioritizing safety, which means that in different market conditions, the composition of the collateral pool looks meaningfully different.

Right now, with crypto market volatility elevated and DeFi yields compressed, the allocator has weighted heavily toward strategies with low correlation to digital asset markets. Private credit is one of the few asset classes that fits that description, and Fasanara's F-TAC fund is where the majority of that exposure sits, currently up to 60% of the collateral pool.

The protocol permits up to 65% concentration into F-TAC, but the allocator will reduce that position as market conditions shift, when on-chain yields recover, when better risk-adjusted alternatives emerge, or when the gap between private credit returns and other sources narrows enough to justify rebalancing. The allocation reflects the market we're in, not a permanent thesis about private credit being the only answer.

With that context in place: here's what Fasanara actually is, how the fund works, and where the risk genuinely sits.

When people hear "private credit" most of them quietly assume it's the kind of thing that blew up in 2008. That's a reasonable instinct. It's also wrong here, but the burden is on us to explain why, not on you to take our word for it.

Noon’s Private Credit exposure held in Fasanara Capital's F-TAC strategy is currently the largest single allocation inside sUSN's collateral pool, at roughly 60% of assets. That concentration is fair to be curious about. This post attempts to answer that curiosity properly: what Fasanara’s F-TAC strategy actually does, how the fund is structured, where the risk genuinely sits, and what the track record looks like.

We'll try to be useful rather than defensive.

Fasanara Capital is a London-based alternative asset manager founded in 2011, and regulated by the UK’s Financial Conduct Authority (FCA). They manage about $6 billion in assets across a range of credit strategies. The specific vehicle that Noon deploys into is the F-TAC (Fasanara Trade and Asset Credit) fund which focuses on short-duration specialty finance assets.

FTAC lends money to businesses with near-term receivables (think: an invoice that will be paid in 90 days), buys trade receivables from fintech originators, and provides working capital to SMEs. There are a few critical features about FTAC which are critical to understand.

In addition to the above, as an asset manager regulated by the UK’s FCA, the FTAC Fund has a well-established external auditor, KPMG, that performs complete annual audits of FTAC’s entire loan book and the past year’s returns, as well as an external fund administrator, JTC, which conducts monthly reviews of the previous month’s performance. This is critical to ensuring that the returns and performance FTAC reports are real, accurate, and verifiable.

Let's put the track record on the table. All figures below are sourced from Fasanara's official factsheet and strategy deck.

F-TAC was seeded in September 2023, so the track record is relatively short in absolute terms, roughly 30 months of live data. However, F-TAC deploys into six sector-specific sub-funds, which Fasanara has much longer track record of managing (e.g., 5-10 years for Receivables, Consumer, Real Estate). F-TAC's monthly return table shows no negative months across the period since inception, with typical monthly returns between 1.0% and 1.7%.

That consistency is either genuinely reflective of the low-volatility nature of self-liquidating receivables, or it's a function of a benign credit environment. The honest answer is that the strategy hasn't yet been tested by a significant credit dislocation at scale - although strong performance through the past 6 months, during the FBG bankruptcy and other sector-wide headwinds, have given us more confidence in FTAC's long term performance. This, in turn, has given us more comfort to increase our allocation to FTAC.

This is probably the most important thing to understand. Fasanara is not making corporate loans. They are not financing leveraged buyouts, simply enabling vanilla, unsecured corporate leverage, or lending against speculative assets like real estate.

The core of the portfolio is asset-backed specialty finance:

Trade receivables: A business is owed money on a delivered invoice. Fasanara advances capital against that invoice and is repaid when the buyer pays. Short duration. Self-liquidating. The asset exists because a real transaction already happened.

SME working capital: Small and medium enterprises borrowing against near-term revenue or receivable flows. Higher risk than trade finance, but short-duration and typically secured against specific cash flow.

Consumer loans via fintech originators: Originated through a global network of technology-enabled lenders. These add yield and diversification but also carry more credit risk than pure trade receivables, consumer creditworthiness is less predictable than corporate invoice settlement.

Specialty receivables: Niche exposure including sports and media receivables. Smaller allocation. Higher idiosyncratic risk.

Liquid credit instruments: A smaller portion for portfolio management purposes.

The structural difference that matters most for sUSN is the combination of short duration and open-ended liquidity. A standard private credit fund might lock capital for seven years and deploy into five-year loans. If Noon needs to exit or rebalance, a short-duration open-ended vehicle is meaningfully different from a closed-end fund with a five-year lock.

Being honest about this is more useful than glossing over it.

The two risks worth taking seriously are mark-to-model valuation and systemic credit stress.

On valuation: private credit NAVs don't reprice daily the way public bonds do. Fasanara's reported returns are smooth partly because the underlying assets don't have live market bids. In a stress scenario, the "real" value of the portfolio might diverge from the reported NAV before management has time to reflect it. This is not unique to Fasanara, it's a structural feature of all private credit, but it's worth understanding. The mitigant here is that Fasanara's external auditors verify the portfolio's NAV on a monthly basis.

On systemic stress: trade receivables and SME working capital tend to hold up reasonably well in normal recessions because they're short-duration and self-liquidating. But in a sharp global credit crunch, where buyers stop paying invoices, SMEs go under in waves, and fintech originators freeze, the correlation between individual defaults goes up. This is the scenario where the diversification benefit shrinks. This is mitigated by the quality of borrowers in Fasanara's loan portfolio, and the asset-backed nature of each position.

We currently permit up to 65% concentration into FTAC. That's a fair thing to push back on, and we want to address it directly rather than talk around it.

The rationale is yield in these market conditions. Our automatic allocator determines our optimal allocation - and in this market condition, with low interest rates and weak DeFi yields, Private Credit is one of the few asset classes that offers market leading yields with low risks.

Specifically, Fasanara has consistently delivered 14-20%+ gross returns, which is a meaningful component of the yield sUSN passes through to stakers. In this market, reducing the allocation would reduce the sustainable yield. That's the trade-off.

That said, we're actively monitoring the allocation and the diversification of sUSN's collateral pool as market conditions evolve. Our allocation will reflect the realities of the market around us - and our users can rest assured that they are getting the highest yields, while taking on the lowest amount of risk possible.

The short version: sUSN's yield would compress, and Noon would rebalance the collateral mix. sUSN is overcollateralised and the protocol has reserve mechanisms, the Insurance Fund is specifically structured to absorb periods where strategy returns underperform. You can read the full mechanics in our collateral documentation.

The longer version: because Fasanara's portfolio is short-duration and self-liquidating, a "bad quarter" would most likely manifest as lower-than-expected returns rather than sudden capital loss. The assets don't implode overnight, interest stops being paid, defaults tick up, and the NAV degrades more slowly than, say, a volatile token price. That gives the protocol time to respond.

The black-swan event for Fasanara has actually taken place in the last 6 months, with the bankruptcy of FBG Group in September 2025. Given the reason for the collapse was related to fraud, which impair creditors' (like Fasanara's) ability to fall back on the assets used as collateral - and given FBG Group was among FTAC's largest single borrowers, this event was the perfect storm for our deployment into FTAC. Despite these extreme headwinds, the combination of Fasanara's risk framework and Noon's deployment strategy / insurance mechanism was able to absorb this event without a single down day for sUSN, and no impact to any users.

A concern when it comes to Private Credit Deployments is liquidity - or time to exit. Your typical private credit fund often does not permit early withdrawals (i.e. before the end of the fund's life) without significant penalties - so this is a very valid concern.

There are two major mitigants to this concern. The first is the structure of the F-TAC fund. The length of the average loan is significantly shorter than the industry average, allowing Fasanara to honour quarterly redemptions. This is already a significant step above the industry average.

The second is Noon's proprietary liquidity management strategy (PLMS). We have designed a multi-party framework that allows us to warehouse illiquid deployments like Fasanara's F-TAC, and ensures that we're able to redeem 100% of our TVL in T+5 days, at most.

This combination mitigates one of the major concerns around Private Credit deployments.

We chose Fasanara after a rigorous few months of detailed risk assessment. After our extensive review, we concluded that its risk-adjusted yields are very strong. Short-duration, unlevered, investment-grade, open-ended, and genuinely diversified across hundreds of positions. That's not a typical private credit fund. It's designed to behave differently.

On duration: the average F-TAC asset matures in 126 days. The loans are tied to specific commercial transactions, and repay themselves when the underlying trade settles. There's no refinancing risk, no dependence on a company's future profitability. The exit is baked in from day one. You're betting on the completion of a trade, not the long-term solvency of a single entity.

On diversification: ~300,000 positions across 45 countries, average size 0.03 basis points of NAV. A single default is noise. Correlated defaults at scale would require simultaneous failure across hundreds of short-duration, asset-backed positions in dozens of geographies, a scenario without a clean historical precedent.

On liquidity: quarterly redemptions backed by short-duration assets are already better than most private credit. Add PLMS and the practical answer is 100% of TVL redeemable in T+5 days. On returns: because F-TAC's yield comes from invoice settlement and trade receivables, it moves independently of token prices and equity markets. In a protocol with inherent digital asset exposure, that matters.

The things we're watching: divergences in valuation of the underlying portfolio, and any signs of systematic stress. And as the market moves and the gap between private credit returns and other yield sources decreases, our optimal allocation will adjust accordingly.

The track record is short. We know that. We're not pretending 30 months of no negative months is a 20-year stress test. We're saying two things: we have structured this deployment to handle a range of scenarios, and we have seen significant adverse events in our deployment period, like the FBG bankruptcy,  and seen our structure perform exactly as we expected, eliminating downside volatility entirely.

We understand the risks deeply. We've built a system to account for them. And we've seen that system perform exceptionally well under some of the most adverse situations this deployment strategy could face.

Source documents (primary, Fasanara):

All performance figures cited are gross returns as reported in Fasanara Capital's official materials. Past performance does not guarantee future results. This post is informational and does not constitute financial advice.