Affirm and PGIM Fixed Income Expand Partnership with Completion of Private Purchase of $500 Million in Loans

Rhea-AI Summary

Affirm Holdings (NASDAQ: AFRM) and PGIM Fixed Income, a Prudential Financial company, announced the completion of a $500 million private purchase of Affirm loans. This transaction deepens their partnership, with PGIM Fixed Income managing over $120 billion in assets across public and private securitized credit. Previously, PGIM invested in Affirm’s public asset-backed securitizations. Affirm has issued 21 securitizations totaling nearly $10 billion, involving over 130 capital partners. PGIM sees Affirm’s assets as an attractive investment opportunity, enhancing its origination relationships. Affirm empowers 19 million active consumers and generated over $28 billion in GMV for the last twelve months ending September 30, 2024. Its funding capacity has grown by 50% over the last two years to $16.8 billion as of September 30, 2024.

Positive

• Completion of $500 million private purchase of Affirm loans by PGIM Fixed Income.
• Affirm’s total funding capacity increased by 50% over the last two years to $16.8 billion.
• Affirm generated over $28 billion in GMV for the last twelve months ending September 30, 2024.

Negative

• None.

Insights

Financial Analyst

This $500 million loan purchase by PGIM Fixed Income marks a significant expansion of Affirm's funding capacity and diversification strategy. The deal's importance lies in transitioning from public securitizations to private purchases, potentially offering more favorable terms and operational flexibility. With $16.8 billion in total funding capacity and $28 billion in GMV, Affirm demonstrates robust capital management and growth trajectory.

The partnership with PGIM, managing $859 billion in assets, adds credibility and stability to Affirm's funding model. Having issued 21 asset-backed securitizations totaling nearly $10 billion and engaging with 130+ capital partners shows strong market acceptance. This institutional backing is important for sustaining growth in the competitive BNPL sector and maintaining favorable borrowing costs.

Credit Market Specialist

The private loan purchase structure represents a strategic evolution in Affirm's funding approach. Direct institutional purchases can offer better economics compared to traditional securitizations by reducing transaction costs and providing more flexible terms. PGIM's expanded commitment, particularly through their specialized asset-based finance platform, signals strong confidence in Affirm's underwriting quality and credit performance.

The 50% growth in funding capacity over two years, coupled with this new funding channel, strengthens Affirm's position in maintaining competitive merchant rates and consumer terms. This diversified funding approach helps insulate against market volatility and provides operational stability.

SAN FRANCISCO--(BUSINESS WIRE)-- Affirm Holdings, Inc. (NASDAQ: AFRM), the payment network that empowers consumers and helps merchants drive growth, and PGIM Fixed Income, a Prudential Financial (NYSE: PRU) company and one of the largest global fixed income managers with $859 billion in assets under management, today announced that PGIM Fixed Income has completed an inaugural private purchase of $500 million in Affirm loans.

The transaction deepens Affirm’s partnership with PGIM Fixed Income, which manages a leading asset-based finance (“ABF”) platform and more than $120 billion in assets under management across public and private securitized credit*. Previously, PGIM Fixed Income invested in Affirm’s assets via the company’s public asset-backed securitizations. As a scaled and programmatic issuer, Affirm has issued 21 asset-backed securitizations totaling nearly $10 billion with participation from over 130 unique capital partners across institution types, including: alternative asset managers, insurance companies, pension funds, sovereign wealth funds, hedge funds, and banks.

"We are pleased to further invest in our partnership with Affirm as we selectively expand our origination relationships and identify investments that provide compelling risk-adjusted returns for our clients from partners that put the needs of their clients first,” said Edwin Wilches, Managing Director and Co-Head of Securitized Products at PGIM Fixed Income. “As we see the pay-over-time industry growing, we believe that Affirm’s assets represent an attractive investment opportunity. We are excited to build a mutually beneficial long-term partnership that combines Affirm’s differentiated approach to managing credit with PGIM’s deep experience and established platform as an asset-based finance lender.”

“Our differentiated approach to underwriting every transaction has enabled us to deliver consistently strong credit outcomes and attract some of the top investors in the world,” said Brooke Major-Reid, Chief Capital Officer at Affirm. “We are thrilled to deepen our partnership with PGIM as we strengthen our funding platform and capitalize on our significant momentum. As one of the largest global asset managers with a meaningful third-party investor base, we believe that PGIM is an ideal partner to help Affirm advance our mission of delivering honest financial products that improve lives.”

Affirm empowers more than 19 million active consumers with a transparent and flexible way to pay over time without late or hidden fees. The company generated over $28 billion in gross merchandise volume (GMV) for the last twelve months ending September 30, 2024. With a diverse and durable funding model across multiple channels, Affirm has grown its total funding capacity by over 50% over the last two years to $16.8 billion as of September 30, 2024.

About Affirm

Affirm’s mission is to deliver honest financial products that improve lives. By building a new kind of payment network – one based on trust, transparency and putting people first – we empower millions of consumers to spend and save responsibly, and give thousands of businesses the tools to fuel growth. Unlike most credit cards and other pay-over-time options, we never charge any late or hidden fees. Follow Affirm on social media: LinkedIn | Instagram | Facebook | X.

About PGIM FIXED INCOME

PGIM Fixed Income, with $859 billion in assets under management as of September 30, 2024, is a global asset manager offering active solutions across all fixed income markets. The company has offices in Newark, N.J., London, Amsterdam, Zurich, Munich, Paris, Singapore, Sydney, Hong Kong, and Tokyo. For more information, visit pgimfixedincome.com.

About PGIM

PGIM is the global asset management business of Prudential Financial, Inc. (NYSE: PRU). In 42 offices across 19 countries and jurisdictions, our more than 1,400 investment professionals serve both retail and institutional clients around the world.

As a leading global asset manager with $1.4 trillion in assets under management,* PGIM is built on a foundation of strength, stability, and disciplined risk management. Our multi-affiliate model allows us to deliver specialized expertise across key asset classes with a focused investment approach. This gives our clients a diversified suite of investment strategies and solutions with global depth and scale across public and private asset classes, including fixed income, equities, real estate, private credit, and other alternatives. For more information visit pgim.com.

*As of Sept. 30, 2024.

AFRM-F

View source version on businesswire.com: https://www.businesswire.com/news/home/20241203806661/en/

Affirm Contacts

Investor Relations

ir@affirm.com

Media

press@affirm.com

Source: Affirm Holdings, Inc.

FAQ

What is the value of the private purchase of Affirm loans by PGIM Fixed Income?

The private purchase of Affirm loans by PGIM Fixed Income is valued at $500 million.

What is the total funding capacity of Affirm as of September 30, 2024?

Affirm's total funding capacity is $16.8 billion as of September 30, 2024.

How much gross merchandise volume (GMV) did Affirm generate for the last twelve months ending September 30, 2024?

Affirm generated over $28 billion in GMV for the last twelve months ending September 30, 2024.

How many securitizations has Affirm issued?

Affirm has issued 21 asset-backed securitizations totaling nearly $10 billion.