Securitize has submitted an ARFC to list HINC, the tokenized share class of the Neuberger Securitize High Income Tokenized Fund, on Aave Horizon on Ethereum. The proposal would allow HINC to be posted as supply-only collateral, with USDC, GHO and RLUSD available to borrow against it.
If approved, HINC would become the first sub-investment-grade credit collateral on Horizon. That would widen the platform’s real-world asset mix beyond tokenized Treasuries, government money market funds and investment-grade credit, while also introducing a higher-volatility credit product with a different liquidation profile from the assets Horizon supports today.
What HINC is and how it is structured
HINC is a British Virgin Islands professional fund advised by Securitize Capital LLC and sub-advised by Neuberger Berman Investment Advisers LLC, an SEC-registered investment adviser that is part of a group with about $567 billion in assets under management as of March 31, 2026. The fund invests mostly in high-yield corporate bonds, with the remainder allocated to CLO tranches, bank loans and other high-yielding fixed-income assets, alongside a liquidity sleeve that includes cash equivalents and tokenized Treasury or money market fund instruments.
The token itself is a permissioned DSToken on Ethereum issued through Securitize’s DS Protocol. Securitize Transfer Agent, an SEC-registered transfer agent, maintains the master securityholder record. The proposal says this is the same issuer and transfer-agent stack already used for VBILL, the VanEck Treasury fund integrated with Aave Horizon.
The fund began its term on August 18, 2026. Shares start at $1,000 and are then issued at NAV per share. Minimum subscription is $100,000 initially and $1,000 for additional purchases. Subscriptions are accepted each business day in fiat dollars or certain stablecoins, while redemptions can be requested on business days with a 2:00 p.m. Eastern cutoff and a targeted T+1 payout. HINC is structured as a NAV-accruing, non-rebasing token, and no distributions are expected because income is intended to be reinvested.
Why Securitize says Horizon needs it
In the proposal, Securitize argues that Horizon’s current collateral base is solid but narrow. Because much of it is tied to low-risk yield products, the expected return on the collateral can sit near or below stablecoin borrowing costs. In that setup, borrowing tends to reflect short-term liquidity needs rather than sustained demand.
Securitize says HINC could change that by adding an asset with an expected return materially above prevailing stablecoin borrow rates. It outlines two possible demand sources: users who independently choose to borrow stablecoins against HINC and re-subscribe to the fund, and investors such as credit funds, family offices or treasury desks that want liquidity without redeeming their holdings. The proposal explicitly frames those as illustrative protocol-level use cases by independent eligible users, not as a fund strategy or recommendation from the issuer or adviser.
The firm also argues that HINC should not be treated as a new asset category for Horizon. Its position is that the instrument is still a tokenized, NAV-priced fund share similar in form to other tokenized funds already listed, with the main difference being the underlying portfolio’s credit quality and volatility.
Risk profile, controls and liquidation design
The proposal makes clear that HINC carries more credit risk than Horizon’s existing collateral set. It describes the product as sub-investment-grade and notes specific concerns including liquidity mismatch, CLO structural risk and the absence of operating history for the fund itself. Illustrative metrics cited in the filing include annualized return of 7.21% since inception over 2016 to 2026, a worst month of negative 18.25% in March 2020, a 2022 loss of 8.97%, and estimated immediate NAV impacts of about 7% to 9% for a 200-basis-point spread widening and 14% to 18% for a 400-basis-point widening.
At the fund level, the proposal says there is no leverage, though CLO debt tranches can carry structural leverage of roughly 6x to 8x at the BB level. Corporate issuer exposure is generally targeted within 5% per issuer and sector exposure within 20%. The CLO allocation is expected to range from 0% to 30% over time.
Because HINC is a permissioned security token, transfer controls are central to the design. Only wallets that have passed KYC and AML checks and are allowlisted can hold or receive the token, and the transfer agent has freeze and seize powers to comply with legal orders or handle lost-key and estate cases. Securitize says that means theft-style exfiltration is not the main concern for suppliers; instead, the key protocol risks are illiquidity, NAV mark moves and the possibility that a frozen position becomes temporarily impossible to liquidate while debt continues to accrue.
Oracle setup and what happens next
For pricing, the proposal calls for a Chainlink NAV feed for HINC under the TSSO standard, publishing daily NAV per share in U.S. dollars based on each business day’s closing value. The proposed design caps positive growth recognition at 15% APR, passes negative NAV moves through immediately, pauses borrowing if the feed becomes stale, and allows a multisig to halt borrowing in the event of a feed anomaly.
On liquidation, Securitize says HINC should not be treated like a continuously traded token. The proposal assumes liquidation would occur over a bounded business-day process rather than in real time, with backstop capital sized at 3% to 5% of borrowed total value locked and a three-business-day liquidation window. It also says at least two independent third-party liquidators should be onboarded before any Phase 2 cap expansion, and those entities would need to be registered holders of record before a liquidation event.
Several items remain open in the filing, including upgradeability documentation, audit history, the oracle attestation chain and the final Chainlink feed requirement. Securitize has committed to provide a full technical assessment package through the transfer agent and to onboard liquidators before launch, while Securitize Capital says it would publish ongoing information on assets under management, portfolio composition and NAV history. The next confirmed step is governance review of the ARFC and any follow-on risk parameter work needed before a listing could move ahead.
Source: governance.aave.com