NEW YORK - Pagaya (NASDAQ:PGY) Technologies LTD. (NASDAQ: PGY), an AI-driven financial technology firm, has successfully closed two asset-backed securitization (ABS) transactions, totaling $1 billion. The transactions, named PAID 2024-10 and RPM 2024-3, include the company's fourth AAA-rated personal loan ABS and its inaugural AA-rated auto loan ABS.
The deal attracted substantial interest, with 28 unique investors participating, most of whom are repeat backers, indicating a strong demand for Pagaya's AI-enabled consumer credit assets. The oversubscribed nature of the transactions underscores the confidence investors have in the company's financial products.
With these latest transactions, Pagaya has raised over $25.2 billion through 62 ABS deals since 2018, reinforcing its position as the leading personal loan ABS issuer in the United States by issuance size. The company's AI-powered network, which is utilized to originate the personal and auto loans backing the notes, has been instrumental in meeting the needs of significant financial institutions.
Ralph L. Leung, Pagaya's COO and CCO, commented on the company's ability to deliver diverse, AI-driven assets at scale and its robust lending partner pipeline. He noted that Pagaya is achieving more favorable terms in the funding markets, with lower spreads and reduced risk retention requirements, as a result of the strong performance of its deals.
Pagaya leverages machine learning and an extensive data network to offer consumer credit and residential real estate products. Its proprietary API and capital solutions are integrated into a network of partners, aiming to enhance user experiences and expand access to financial services. Headquartered in New York with an office in Tel Aviv, Pagaya continues to shape the financial services ecosystem through its innovative technology.
This news is based on a press release statement from Pagaya Technologies LTD.
In other recent news, Pagaya Technologies and LendingClub (NYSE:LC) Corporation have partnered to acquire the intellectual property of Tally Technologies, a credit card management solutions company. This acquisition aims to enhance LendingClub's member engagement platform and expand Pagaya's B2B offerings. Pagaya also reported strong Q2 2024 earnings, with a network volume of $2.3 billion and a record $50 million in adjusted EBITDA. Despite a net loss of $75 million due to share-based compensation and fair value adjustments, the company raised its full-year outlook.
Analyst firms B.Riley and Canaccord Genuity have both reduced their price targets for Pagaya, maintaining a Buy rating. B.Riley adjusted its outlook due to the company's expected decrease in cost of capital and funding, while Canaccord Genuity's adjustment was due to a delay in the HARMONY study.
In executive transitions, Scott Bower stepped down as the principal accounting officer, with Nam Woo Kim assuming Bower's responsibilities on an interim basis. The company also appointed Rajinder Singh, a banking and financial services industry veteran, as its new Chief Risk Officer. These are some of the recent developments within Pagaya Technologies.
InvestingPro Insights
To complement Pagaya Technologies' recent success in closing $1 billion in asset-backed securitization transactions, InvestingPro data reveals some interesting financial metrics. The company's revenue growth has been robust, with a 27.98% increase in the most recent quarter. This aligns well with Pagaya's expanding ABS issuance and growing investor interest in their AI-driven financial products.
Despite the positive news on securitizations, InvestingPro Tips highlight that Pagaya's stock has taken a significant hit over the last week, with a 10.75% decline. This volatility is characteristic of the company, as another InvestingPro Tip notes that stock price movements are quite volatile. This could present both risks and opportunities for investors interested in Pagaya's growth story.
It's worth noting that while Pagaya has not been profitable over the last twelve months, analysts predict the company will turn profitable this year. This projection aligns with the company's improving financial position, as evidenced by their successful ABS transactions and expanding investor base.
For investors seeking a deeper understanding of Pagaya's financial health and future prospects, InvestingPro offers additional tips and insights. There are 7 more InvestingPro Tips available for Pagaya Technologies, which could provide valuable context for evaluating the company's recent securitization success and overall market position.
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