[DigitalToday reporter Jinju Hong] Ripple Prime, Ripple’s institutional finance business affiliate, raised funds to expand its U.S. business by issuing $275 million of senior unsecured notes. The notes’ credit quality is still assessed as depending significantly on parent Ripple’s ability to provide financial support and its XRP holdings.

On Aug. 23 (local time), blockchain media outlet CryptoSlate reported that Ripple Prime completed a private placement of $275 million of senior unsecured notes on Aug. 18. Piper Sandler served as lead arranger for the deal.

Ripple said it plans to use the proceeds for working capital at regulated entities and for general corporate purposes. Public materials did not confirm whether there is a parent guarantee or whether XRP was provided as collateral for the notes.

A key point in the issuance is that Ripple Prime and Ripple Labs are legally separate. The issuer is an intermediate holding company, Ripple Prime CIV US BD HoldCo LLC. Under it is the U.S. operating company, Hidden Road Partners CIV US LLC, with parent Ripple Labs at the top. Regulatory obligations for dealing with clients are handled by the operating broker entity, while debt from the notes accumulates at the holding company.

In July, credit rating agency KBRA assigned a BBB rating with a stable outlook to Ripple Prime CIV US BD HoldCo’s senior unsecured notes. KBRA judged that if a situation arises in which it becomes difficult for dividends or funds to move from the operating company to the holding company, Ripple is likely to step in with financial support.

KBRA in particular viewed Ripple’s financial support as a key factor in its rating assessment. As a result, the note issuance can also be seen as a test of how far Ripple Prime’s institutional finance business is separated from the parent’s financial structure.

It is not confirmed whether XRP was provided as direct collateral. Official public materials also did not specify any XRP pledge or a legally binding payment guarantee from Ripple Labs.

Still, Ripple’s XRP holdings are being assessed as an important factor in judging the parent’s ability to provide support. According to KBRA, after acquiring Hidden Road, Ripple投入 about $500 million to support the expansion of Ripple Prime US’s balance sheet and the achievement of profitability in 2025.

As of the third quarter of 2025, Ripple was assessed to hold about $5 billion in cash and more than 40 billion XRP. KBRA said Ripple’s XRP holdings have substantial unrecognised value, but also pointed out that Ripple’s earnings depend heavily on digital-asset-related businesses, including XRP sales.

Based on Ripple’s latest disclosure, as of June 30 this year it held 37,656,053,914 XRP. Of that, about 32.6 billion XRP is locked in on-chain escrow, while about 5,056,050,000 XRP is held outside escrow.

Ripple maintains a structure under which it puts unused XRP back into escrow. That makes it difficult to apply the current market price of XRP and immediately calculate total holdings as debt repayment capacity. Actual usability must also take into account sale restrictions, existing agreements, market liquidity and the impact of large-scale sales on price.

Ripple Prime’s own business is also still in a growth stage. KBRA assessed that Ripple Prime US posted a profit in 2025, but said the business itself is in an early expansion phase and that revenue is concentrated in spread-based finance.

The company launched an exchange-traded derivatives platform in 2024 and in 2025 also expanded its bond repo business to a meaningful scale. It plans to diversify revenue by adding products such as delta-one instruments and an equity prime brokerage business.

KBRA said the performance of such new businesses has not yet been proven and depends on actual execution. It also cited as a risk factor that profitability can vary widely depending on balance sheet size and interest rates.

Ultimately, the $275 million note sale shows that Ripple Prime can raise large funds in traditional credit markets based on an investment-grade rating.

On the other hand, creditworthiness still leaves Ripple’s willingness to support and the parent’s financial condition, exposed to XRP, as key variables. KBRA judged that the rating could improve if stable profitability and business scale expansion continue, but that weaker profitability or liquidity, or reduced ability by the parent to provide support, could weigh on the rating.