Tether Holdings Ltd., the issuer of the largest stablecoin USDT, has provided more details than ever before on the composition of its $62.8 billion in reserves in a new attestation report.
Investors had been waiting for this information for a long time. The company issued its first attestation report in March, revealing the total value of its assets and liabilities. Tether published a breakdown of its reserves in May, revealing that commercial paper accounted for roughly half of its reserves. However, the breakdown report was not “attested” to.
Tether included a breakdown of the ratings and maturity of its commercial paper (CP) and certificates of deposit (CD) in its most recent attestation report, in addition to the composition of its reserves (CDs).
According to the June 30 report, $30.8 billion, or 49 percent of Tether’s reserves, were held in CP and CDs, with roughly 93 percent rated A-2 and above and 1.5 percent rated below A-3. Tether executives previously told CNBC that the commercial paper they were holding was “overwhelmingly rated A-2 or better.”
Liabilities versus assets
Tether had $62.8 billion in total assets as of June 30, up from $35.3 billion on February 28, the date of its most recent attestation report.
According to CoinGecko, Tether has a circulating supply of $62.7 billion as of Monday.
According to the attestation, other reserves included $6.28 billion in cash and bank deposits, or 10% of the total, $1 billion in reverse repo notes (1.6%), and $15.28 billion in U.S. Treasury bills (24.3%). Tether reported in May that commercial paper accounted for approximately 50% of its reserves, fiduciary deposits 18%, cash 2.9 percent, reverse repo notes 2.7 percent, and Treasury bills 2.2 percent.
In addition, the company held $2.52 billion in secured loans and $4.83 billion in corporate bonds, funds, and precious metals, accounting for 4% and 7.7% of its reserves, respectively. Tether stated in the report that it had “no secured loans to affiliated entities.” Tether’s “other investments,” which included digital tokens, totaled $2.05 billion, or 3.3 percent of its reserves.
According to the May breakdown, secured loans accounted for approximately 13% of Tether’s reserves, while corporate bonds and precious metals accounted for 10%. A total of 1.6 percent was invested in “other investments (including digital tokens).”
According to the report, Tether was the defendant in four ongoing legal cases as of June 30, “the outcomes of which cannot yet be reasonably reliably estimated by management.”
According to the report, “any contingent liability in respect of these proceedings has not been accrued.”
Commercial paper and certificates of deposit are broken down.
Approximately $149.8 million, or 0.5 percent of Tether’s CP and CDs, were rated higher than A-1.
A-1 ratings were assigned to approximately $14.5 billion, or 47 percent of total CP and CDs. The company’s A-2 and A-3 rated holdings were $14 billion and $1.7 billion, respectively, accounting for 45 percent and 5.5 percent of the total CP and CDs allocation.
According to the report, $459.3 million, or 1.5 percent of the CP and CDs, were rated below A-3.
Tether stated that the ratings referred to Standard & Poor’s short-term credit ratings when they were available. According to the report, “publicly available industry-standard conversion tables have been used to convert ratings from Moody’s or Fitch to the S&P equivalent.”
The commercial paper issuers were not disclosed by the company.
Approximately $10.6 billion, or 34% of its CP and CDs, had maturities of three months or less. Approximately $6.5 billion, or 21% of its CP and CDs, will mature in more than three months and less than six months, while $13.7 billion, or 45%, will mature in more than six months and less than a year.