Pagaya Announces New $600 Million Consumer Loan ABS Deal, Underscoring Strong Momentum Ahead of 2025

Rhea-AI Summary

Pagaya Technologies (NASDAQ: PGY) has announced the closing of a $600 million AAA-rated personal loan ABS transaction (PAID 2024-11) and expects to close an additional $100 million pass-through transaction (PT 2024-2) next week. The PAID 2024-11 deal was oversubscribed and upsized from its original $500 million target, demonstrating strong investor demand. 29 unique investors participated across both transactions, mostly repeat investors.

Since 2018, Pagaya has raised nearly $26 billion across 64 ABS transactions to fund loan originations in personal loan and auto sectors. The company's increasing scale and stable asset performance, combined with improving market conditions, is enabling execution at lower spreads with more efficient capital use.

Positive

• Secured $600M AAA-rated ABS deal with additional $100M transaction pending
• Deal was oversubscribed and upsized from original $500M target
• Strong investor retention with majority being repeat investors
• Demonstrated consistent growth with $26B raised across 64 ABS transactions since 2018
• Achieving lower spreads and more efficient capital utilization

Negative

• None.

Insights

Financial Analyst

The successful closing of a $600M AAA-rated ABS deal and an additional $100M pass-through transaction represents significant financial engineering prowess. The oversubscription and upsizing from $500M to $600M indicates robust institutional investor confidence in Pagaya's AI-driven credit assessment model. With $26B raised across 64 ABS transactions since 2018, Pagaya demonstrates strong market acceptance and scalability. The lower spreads and improved capital efficiency point to potential margin expansion and stronger profitability ahead. The high proportion of repeat investors (majority) suggests satisfaction with previous performance and reduced acquisition costs for future deals.

Tech Analyst

Pagaya's AI-driven approach to consumer credit assessment is gaining significant market validation through these successful ABS deals. The company's technology platform has demonstrated consistent performance in evaluating and packaging consumer loans, as evidenced by the AAA rating and strong investor interest. The ability to attract 29 unique investors, mostly repeat participants, validates the reliability and effectiveness of their AI models in risk assessment. This technological edge in credit decisioning provides a competitive moat and positions Pagaya favorably in the fintech space, particularly as traditional lending models face challenges in accurately assessing consumer creditworthiness.

Closes $600 million AAA-Rated Personal Loan ABS deal and prices $100 million Personal Loan pass-through transaction

NEW YORK--(BUSINESS WIRE)-- Pagaya Technologies LTD. (NASDAQ: PGY) ("Pagaya" or “the Company”), a global technology company delivering AI-driven product solutions for the financial ecosystem, today announced the closing of a $600 million AAA-rated personal loan ABS transaction (PAID 2024-11) and expects to close an additional $100 million pass-through transaction (PT 2024-2) next week.

A total of 29 unique investors participated across these two new transactions, the majority of which were repeat investors. Additionally, PAID 2024-11 was substantially oversubscribed and upsized from its original size of $500 million, reflecting continued strong investor demand for Pagaya’s robust, AI-enabled consumer credit assets. Since 2018, Pagaya has raised nearly $26 billion across 64 ABS transactions to fund loan originations across multiple products, including personal loan and auto.

“As a leading provider of access to consumer assets for U.S. capital markets, Pagaya consistently proves the strength and efficacy of its technology and network,” said Sanjiv Das, President of Pagaya. “Our increasing scale and track record of stable asset performance, combined with improving capital markets conditions, is enabling us to execute at lower spreads and with more efficient use of our capital, supporting our growth heading into 2025.”

About Pagaya Technologies

Pagaya (NASDAQ: PGY) is a global technology company making life-changing financial products and services available to more people nationwide, as it reshapes the financial services ecosystem. By using machine learning, a vast data network and an AI-driven approach, Pagaya provides comprehensive consumer credit and residential real estate products for its partners, their customers, and investors. Its proprietary API and capital solutions integrate into its network of partners to deliver seamless user experiences and greater access to the mainstream economy. Pagaya has offices in New York and Tel Aviv. For more information, visit pagaya.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241212914167/en/

Investors & Analysts

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Media & Press

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Source: Pagaya Technologies LTD.

FAQ

What is the size of Pagaya's (PGY) latest ABS transaction in 2024?

Pagaya's latest ABS transaction (PAID 2024-11) is $600 million, which was upsized from an original target of $500 million, with an additional $100 million pass-through transaction (PT 2024-2) expected to close next week.

How many investors participated in Pagaya's (PGY) 2024 ABS transactions?

29 unique investors participated across the two new transactions (PAID 2024-11 and PT 2024-2), with the majority being repeat investors.

How much has Pagaya (PGY) raised through ABS transactions since 2018?

Since 2018, Pagaya has raised nearly $26 billion across 64 ABS transactions to fund loan originations across multiple products, including personal loan and auto.

What impact will the new ABS deals have on Pagaya's (PGY) capital efficiency?

The new ABS deals, combined with improving capital markets conditions, enable Pagaya to execute at lower spreads and with more efficient use of capital, supporting growth heading into 2025.