SoFi and PGIM Fixed Income Announce $525 Million Securitization Agreement, Signaling Continued Demand for Personal Loans

Rhea-AI Summary

SoFi Technologies (NASDAQ: SOFI) has secured a $525 million personal loan securitization agreement with PGIM Fixed Income in Q4 2024. This represents the partners' largest transaction to date and follows a previous $350 million investment from PGIM in May 2024. The deal builds upon SoFi's successful track record, having sold or securitized $3.9 billion in personal loan collateral through Q3 2024.

PGIM Fixed Income, managing $859 billion in assets including $120 billion in securitized credit, views SoFi's personal loans as an attractive investment opportunity. This announcement follows SoFi's recent $2 billion agreement with Fortress Investment Group in Q4 2024 to expand its loan platform business, demonstrating the company's strategy to diversify its funding program through various partnerships.

Positive

• Secured $525 million personal loan securitization agreement with PGIM
• Successfully sold/securitized $3.9 billion in personal loan collateral through Q3 2024
• Secured $2 billion agreement with Fortress Investment Group in Q4 2024
• Demonstrates strong investor demand for SoFi's loan products
• Expanding funding diversification through multiple partnerships

Negative

• None.

Insights

Financial Analyst

This $525 million securitization deal with PGIM Fixed Income represents a strategic milestone in SoFi's funding diversification strategy. Following their $350 million investment in May 2024 and building on $3.9 billion in personal loan collateral sales through Q3 2024, this partnership demonstrates robust institutional confidence in SoFi's loan quality and underwriting standards.

The transaction's timing and size are particularly noteworthy given the current interest rate environment. This deal, combined with the recent $2 billion Fortress agreement, showcases SoFi's ability to attract major institutional investors and maintain strong funding channels. The company's multi-channel funding approach - including whole loan sales, securitizations and referral partnerships - provides operational flexibility and reduces dependency on any single funding source.

PGIM's increased commitment, from $350 million to $525 million, suggests growing confidence in SoFi's credit quality and returns potential. With PGIM managing $859 billion in assets, including $120 billion in securitized credit, their expanded investment validates SoFi's business model and could attract additional institutional investors.

Credit Market Specialist

The structure of this securitization agreement reveals important dynamics in the personal lending market. The sequential increase in transaction size with PGIM ($350M to $525M) indicates strong performance of the initial investment and growing appetite for consumer credit assets. The timing aligns with a broader market trend of institutional investors seeking yield through consumer credit exposure.

The deal's execution in Q4 2024 is particularly strategic as it helps SoFi lock in funding costs in a volatile rate environment. When combined with the $2 billion Fortress deal, SoFi has effectively secured significant funding capacity for 2025. This strengthens their competitive position in personal lending and provides a buffer against potential market volatility.

For retail investors, these institutional partnerships signal strong underlying asset quality and sustainable growth in SoFi's lending business. The company's ability to execute large-scale securitizations while maintaining relationships with multiple institutional investors indicates robust risk management and operational efficiency.

Partners’ Largest Transaction To-Date is Second in a Series of Continued Investments by PGIM

SAN FRANCISCO--(BUSINESS WIRE)-- SoFi Technologies, Inc. (NASDAQ: SOFI), a member-centric, one-stop shop for digital financial services that helps members borrow, save, spend, invest and protect their money, today announced a $525 million personal loan securitization agreement closed in Q4 2024 with funds and accounts managed by PGIM Fixed Income, one of the largest global fixed income managers – with $859 billion in assets under management (AUM), including $120 billion in public and private securitized credit AUM.

The transaction follows a $350 million investment from PGIM in May 2024. It builds on the $3.9 billion in personal loan collateral SoFi sold or securitized to-date through the end of Q3 2024, illustrating the value of the company’s leading personal loan business.

Edwin Wilches, Managing Director and co-Head of Securitized Products at PGIM Fixed Income, said, “SoFi’s personal loans represent an attractive investment opportunity for PGIM, and we’re thrilled to deepen our relationship with the company. We continue to expand our platform as an asset-based finance lender and source investments that provide compelling risk-adjusted returns for our clients with partners who put their customers first.”

“The investor demand we see for SoFi’s personal loans underscores the quality and strength of our lending business, which continues to contribute meaningfully to our durable growth,” said Anthony Noto, CEO of SoFi. “We are grateful for PGIM’s longstanding partnership as we help more of our members get their money right.”

Today’s news comes on the heels of strong demand for SoFi’s loans in the capital markets, with a range of transactions representing partners’ unique investment goals. For example, in Q4 2024, the company announced a $2 billion agreement with Fortress Investment Group to expand its loan platform business, where the company refers pre-qualified borrowers to loan origination partners and originates loans on behalf of third parties – a key example of SoFi’s diversified funding program.

For more information on SoFi, please visit www.sofi.com.

About SoFi

SoFi (NASDAQ: SOFI) is a member-centric, one-stop shop for digital financial services on a mission to help people achieve financial independence to realize their ambitions. The company’s full suite of financial products and services helps 10 million SoFi members borrow, save, spend, invest, and protect their money better by giving them fast access to the tools they need to get their money right, all in one app. SoFi also equips members with the resources they need to get ahead – like credentialed financial planners, exclusive experiences and events, and a thriving community – on their path to financial independence.

SoFi innovates across three business segments: Lending, Financial Services – which includes SoFi Checking and Savings, SoFi Invest, SoFi Credit Card, SoFi Protect, and SoFi Insights – and Technology Platform, which offers the only end-to-end vertically integrated financial technology stack. SoFi Bank, N.A., an affiliate of SoFi, is a nationally chartered bank, regulated by the OCC and FDIC and SoFi is a bank holding company regulated by the Federal Reserve. The company is also the naming rights partner of SoFi Stadium, home of the Los Angeles Chargers and the Los Angeles Rams. For more information, visit SoFi.com or download our iOS and Android apps.

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View source version on businesswire.com: https://www.businesswire.com/news/home/20250116388146/en/

Media Contacts

For SoFi: Meghan Brown

PR@sofi.org

For PGIM: Ben Jaffe

Ben.jaffe@pgim.com

Source: SoFi Technologies

FAQ

What is the value of SoFi's latest securitization agreement with PGIM in Q4 2024?

SoFi secured a $525 million personal loan securitization agreement with PGIM Fixed Income in Q4 2024.

How much personal loan collateral has SOFI securitized through Q3 2024?

SoFi has sold or securitized $3.9 billion in personal loan collateral through the end of Q3 2024.

What was the value of PGIM's previous investment in SOFI during May 2024?

PGIM made a $350 million investment in SoFi in May 2024.

What is the size of SOFI's agreement with Fortress Investment Group in Q4 2024?

SoFi announced a $2 billion agreement with Fortress Investment Group in Q4 2024 to expand its loan platform business.

How much assets under management does PGIM Fixed Income manage?

PGIM Fixed Income manages $859 billion in assets, including $120 billion in public and private securitized credit AUM.