Pagaya Closes Five-Year $280M Credit Facility with BlackRock, UBS, JPMorgan Chase and Other Lenders
- Securing a credit facility with top global asset managers and financial institutions demonstrates investor confidence in Pagaya's business model and financial strength.
- The facility provides the capital and liquidity needed to support the company's future growth and extends its corporate debt maturity to 2029.
- Pagaya secured four new lending partners in the last four months of 2023, expected to drive a transformational step-change in the company's network expansion.
- The company pre-announced strong full-year 2023 financial performance, with Network Volume exceeding $8.2 billion and Adjusted EBITDA exceeding $75 million.
- None.
Insights
The credit facility secured by Pagaya Technologies, involving top-tier financial institutions, indicates robust market trust in the company's financial health and strategic direction. The $255 million term loan and $25 million revolver enhance the company's liquidity, enabling Pagaya to invest in product innovation and expand its network. This strategic move not only extends the company's debt maturity profile but also potentially lowers future financing costs due to increased credibility.
From an investor's perspective, the participation of reputable firms like BlackRock and UBS O'Connor in the credit facility is a positive signal, suggesting a thorough due diligence process and confidence in Pagaya's business model. The facility's structure, with a sizable term loan and a revolver for flexible capital access, reflects a tailored approach to match the company's growth trajectory and financial strategy. This could result in improved financial metrics, such as Adjusted EBITDA, which Pagaya pre-announced to exceed $75 million for the full year 2023.
Pagaya's recent partnership with four new lending partners, including a major bank and a leading auto captive, is poised to significantly broaden its network reach, enhancing its competitive position in the consumer finance ecosystem. The company's ability to attract diverse capital sources, as evidenced by the credit facility, reflects a strategic emphasis on financial flexibility, which is crucial for scaling operations and responding to market opportunities.
Furthermore, the pre-announced financial performance showcasing a Network Volume exceeding $8.2 billion hints at strong market demand for Pagaya's AI-driven product solutions. This growth is likely to attract further investor attention, potentially impacting the company's stock valuation positively. The company's focus on creating more financial opportunities and fostering new customer relationships aligns with industry trends towards personalized financial services and could contribute to long-term value creation.
Pagaya's core product offering, leveraging AI for financial solutions, is at the intersection of technology and finance, a space that is rapidly evolving and attracting significant investment. The commitment from leading financial institutions underscores the potential of AI in transforming the consumer finance landscape. Pagaya's investment in product innovation, supported by the new credit facility, is critical for maintaining a technological edge and delivering competitive AI-driven solutions.
The company's anticipated use of proceeds to pay off existing borrowings and invest in innovation is a strategic move that could lead to the development of new products and services, further differentiating Pagaya in the market. The emphasis on AI-driven solutions is particularly relevant as the finance industry increasingly adopts digital and automated processes, with AI at the forefront of this transformation.
World’s top global asset managers and financial institutions provide capital to Pagaya to support the Company’s financial strategy and future growth
“This credit facility, led by BlackRock, showcases the confidence and support from some of the largest and most sophisticated financial institutions in the world, as we transform the consumer finance ecosystem in the next phase of our growth journey,” said Gal Krubiner, Co-Founder and CEO of Pagaya.
“We are pleased to partner with Pagaya and support its next stage of growth through this facility,” said Dan Worrell, Managing Director at BlackRock. “We are impressed by the company’s differentiated business model, core product offering, and financial strategy to create more financial opportunities and to enable new customer relationships.”
“The capital commitment demonstrates our ability to access new and diverse capital sources, bolstering our financial flexibility and fortifying our business as we consistently pursue further scale,” added Evangelos Perros, Interim CFO of Pagaya.
In the last four months of 2023, the Company secured four new lending partners, including a top bank and top auto captive, which are expected to drive a transformational step-change in Pagaya’s network expansion. In addition, the Company recently pre-announced strong full-year 2023 financial performance, with Network Volume exceeding
Proceeds from the facility will be used to pay off outstanding borrowings from the Company's previous facility, invest in product innovation, and grow its network with both existing and new lending and investor partners.
Jefferies served as Sole Arranger on the transaction.
About Pagaya Technologies
Pagaya (NASDAQ: PGY) is a global technology company making life-changing financial products and services available to more people nationwide. By using machine learning, a vast data network and a sophisticated AI-driven approach, Pagaya provides comprehensive consumer credit and residential real estate solutions 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
Cautionary Note On Forward-Looking Statements
This Press Release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “expect,” “plan,” “anticipate,” “estimate,” “intend” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. These forward-looking statements may include, but are not limited to, statements regarding the impact of the new credit facility on Pagaya’s business, Pagaya’s ability to effectively use the capital and liquidity provided by the credit facility to support the Company’s future growth, the impact of certain investors’ confidence in Pagaya's business model and financial strength, the extent that the new facility bolsters the Company’s financial flexibility and fortification as it pursues further scale, and the intended use of the proceeds from the new credit facility. These forward-looking statements are based on Pagaya’s expectations and assumptions as of the date of this Release. Each of these forward-looking statements involves risks and uncertainties. Actual results may differ materially from those expressed or implied by these forward-looking statements. For a discussion of risk factors that may cause Pagaya’s actual results to differ from those expressed or implied in the forward-looking statements in this Report, you should refer to Pagaya’s filings with the SEC, including Pagaya’s most recent Form 20-F, particularly the section entitled “Risk Factors”. Except as required by law, Pagaya undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. You should, therefore, not rely on these forward-looking statements as representing Pagaya’s views as of any date subsequent to the date of this Report.
Preliminary Financial Information
The preliminary financial information presented in this press release are based on management’s preliminary, unaudited analysis of financial results for the three months and year ended December 31, 2023 as of the date of this release and subject to change as a result of the completion of the Company’s standard financial and operating closing procedures and customary audit procedures. As of the date of this press release, the Company has not completed its financial statement closing process for the three months and year ended December 31, 2023, and the company’s independent registered accounting firm has not audited the preliminary financial data discussed in this press release. As we complete our quarter and year end close process and finalize our financial statements for the quarter, it is possible that we may identify items that require adjustments to the preliminary financial information set forth above, and those changes could be material. We do not intend to update this preliminary financial information prior to the release of final fourth quarter and full year results later in February 2024. As a result, the preliminary financial information above constitutes forward-looking information and is subject to risks and uncertainties, including possible adjustments, which may cause the Company’s actual results to be different from those set forth above and the differences could be material. Accordingly, you should not place undue reliance on this preliminary financial information.
Non-GAAP Financial Measures
This press release references the following non-GAAP financial measures: Adjusted EBITDA. See our Q3 2023 earnings release press release posted on our Investor Relations website for information regarding non-GAAP financial measures. We do not provide a reconciliation for non-GAAP estimates on a forward-looking basis where we are unable to provide a meaningful calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of various items that would impact the most directly comparable forward-looking
View source version on businesswire.com: https://www.businesswire.com/news/home/20240207824914/en/
Investors & Analysts
Jency John
Head of Investor Relations
ir@pagaya.com
Media & Press
Emily Passer
Head of PR & External Communications
press@pagaya.com
Source: Pagaya Technologies LTD.
FAQ
What is the ticker symbol for Pagaya Technologies LTD.?
What is the purpose of the credit facility announced by Pagaya Technologies LTD.?
What were the financial performance metrics pre-announced by Pagaya Technologies LTD. for full-year 2023?
Which financial institutions participated in the credit facility with Pagaya Technologies LTD.?
What is the purpose of the proceeds from the credit facility for Pagaya Technologies LTD.?
