Pagaya Continues Strong Momentum, Raising More Than $1 Billion Across Two New ABS Deals

Rhea-AI Summary

Pagaya Technologies LTD. (PGY) closes two new asset-backed securitizations, raising $1.03 billion, solidifying its position as a leading ABS issuer in the U.S. The company has raised $21 billion across all ABS transactions since inception, with robust investor demand and growing funding network.

Insights

Financial Analyst

Examining the recent closure of two asset-backed securitizations (ABS) by Pagaya Technologies LTD., we observe a strategic move to diversify funding sources and enhance credit accessibility. The issuance of $792 million in consumer loan-backed notes and $238 million in auto loan-backed notes reflects a strong market appetite for such financial instruments. The company's ability to consistently secure capital through ABS transactions, reaching a milestone of $21 billion raised since inception, indicates robust investor confidence in Pagaya's AI-driven asset offerings.

Furthermore, the lower spreads and upsized issuance mentioned by Pagaya's Chief Capital Officer suggest improved market conditions for the company's debt. These factors could lead to reduced borrowing costs and potentially higher profitability margins. Investors should monitor the performance of these securitizations, as they can serve as indicators of the company's underwriting quality and the AI platform's effectiveness in asset selection.

Market Research Analyst

Pagaya's position as the top personal loan ABS issuer in the U.S. reflects its competitive edge in the financial technology sector. The company's AI-driven product solutions resonate with a market that increasingly values innovation in financial services. Pagaya's growth trajectory, highlighted by its recent partnerships with U.S. Bank and Exeter Finance, positions it favorably within the industry. These partnerships are likely to enhance the company's distribution capabilities and consumer reach.

From a market perspective, the continued expansion of Pagaya's funding network, now boasting over 110 partners, demonstrates the company's scalability and the potential for further market penetration. Stakeholders should consider the implications of Pagaya's aggressive growth strategy, including the risks associated with rapid expansion and the pressure to maintain high-quality loan origination standards.

Legal Expert

The involvement of the Kroll Bond Rating Agency in rating Pagaya's transaction adds a layer of credibility and transparency to the ABS deals. For institutional buyers, the rating provided by an established agency is a critical factor in assessing the risk associated with the securitized assets. It is essential for Pagaya to maintain compliance with regulations governing ABS transactions, ensuring that all disclosures and practices meet the required standards to sustain investor trust and avoid legal pitfalls.

As the company continues to grow and navigate the complex regulatory landscape of financial securitizations, maintaining rigorous due diligence processes and transparency will be paramount in mitigating legal risks and protecting stakeholder interests.

• Third personal loan ABS and first auto ABS of 2024, following $6.6 billion raised across all ABS transactions in 2023
• Pagaya remains the #1 personal loan ABS issuer in the U.S.
• Pagaya reaches nearly $2 billion year-to-date across four ABS transactions

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 two new asset-backed securitizations (ABS) – RPM 2024-1 and PAID 2024-3, its 50th and 51st ABS deals, respectively. Kroll Bond Rating Agency rated the transaction.

Qualified institutional buyers purchased $792 million of notes backed by consumer loans and $238 million of notes backed by auto loans that will be originated by Pagaya’s personal loan and auto lending partners. The Company continues to scale its funding network, with over 110 funding partners and $21 billion raised across its ABS transactions since inception. Pagaya’s innovative and programmatic platform continues to see robust investor demand and underscores the Company’s ability to meet the needs of prominent financial institutions, while helping our lending partners expand access to credit to more people, more often.

“Our unique ability to deliver diverse, AI-driven assets, coupled with a robust lending partner pipeline is more prevalent than ever,” said Paul Limanni, Pagaya’s Chief Capital Officer. “We continue to see increased support and investment in our securitization platforms, which is manifesting itself in lower spreads and upsized issuance.”

These latest transactions continue to support the Company’s momentum following recently announced new lending partnerships with U.S. Bank and Exeter Finance, during a pivotal period of rapid growth of Pagaya’s network.

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 a sophisticated 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/20240313243088/en/

Investors & Analysts

ir@pagaya.com

Media & Press

press@pagaya.com

Source: Pagaya Technologies LTD.

FAQ

How much did Pagaya raise in ABS transactions in 2023?

Pagaya raised $6.6 billion across all ABS transactions in 2023.

How many ABS deals has Pagaya closed with RPM 2024-1 and PAID 2024-3?

Pagaya has closed its 50th and 51st ABS deals with RPM 2024-1 and PAID 2024-3.

How much did qualified institutional buyers purchase in notes backed by consumer loans?

Qualified institutional buyers purchased $792 million in notes backed by consumer loans.

How much funding has Pagaya raised across all its ABS transactions since inception?

Pagaya has raised $21 billion across all its ABS transactions since inception.

What new lending partnerships did Pagaya recently announce?

Pagaya recently announced new lending partnerships with U.S. Bank and Exeter Finance.

Who is Pagaya's Chief Capital Officer?

Pagaya's Chief Capital Officer is Paul Limanni.