Investment firm Pagaya secures a $500 million financing agreement, rated AAA, for its digital asset-backed product, safeguarding continued success in its asset-backed securities programs.
Pagaya Technologies, a global technology company, has closed a significant asset-backed securitization (ABS) worth $500 million. The deal, named PAID 2025-5, received a AAA rating from Kroll Bond Rating Agency (KBRA), reflecting the high quality of the securitization.
This marks the fifth fully-prefunded PAID deal of the year for Pagaya, following the recent closing of Auto RPM 2025-4. The deal was initially targeted at $400 million but was upsized to $500 million, indicating strong demand for Pagaya's securitization offerings.
The securitization is backed by consumer loans originated on the Pagaya network. Pagaya's ABS and forward-flow programs are contributing to the expansion of their investor base and financing flexibility, supporting growth for both lending partners and institutional investors.
The latest PAID transaction, PAID 2025-5, saw participation from 30 unique investors, four of whom are new to Pagaya’s capital markets program. This growing interest in Pagaya's securitization offerings underscores the expanding reach and recognition of the firm's ABS offerings.
Sahil Chandiramani, Head of Capital Markets at Pagaya, stated that the latest PAID transaction demonstrates the depth of investor appetite and the power of their network. Since 2018, Pagaya has completed 75 securitizations, raising nearly $31 billion in capital to fund loans originated through their network.
Pagaya's year-to-date ABS issuance now exceeds $4.6 billion across various verticals, marking a significant milestone in their growth. The company's capital markets engine efficiently scales these programs, consistently attracting funding at peak levels and deepening strategic investor relationships.
Since 2018, Pagaya has adopted an asset-light balance sheet model, minimizing exposure to credit risk by largely avoiding holding loans on its own balance sheet. Instead, it leverages a network of institutional funding partners and issues ABS to fund loans originated through its AI-powered network. Loans are typically acquired immediately by pre-committed funding sources, either via ABS vehicles or forward flow agreements, which has enabled stable growth even amid market volatility and elevated interest rates.
As of March 2025, this model left Pagaya with strong liquidity—$206.5 million in cash and short-term investments—and $507.8 million in debt, positioning the company well for continued ABS program expansion.
Pagaya's ABS program, particularly focused on auto loans, has shown significant growth since 2018, reaching $1.3 billion in Auto ABS issuance year-to-date by mid-2025. The RPM 2025-4 deal, for instance, was oversubscribed with participation from 15 investors, including insurance companies, pension funds, investment managers, and hedge funds, reflecting a broad and diverse investor base.
In conclusion, Pagaya Technologies' ABS program has notably expanded since at least 2018, with 2025 alone seeing $1.3 billion in auto ABS issuance that depends on its AI-driven approach to credit asset management and an asset-light balance sheet model that minimizes risk while attracting diverse institutional investors.
- Pagaya Technologies, a global technology company, has demonstrated a strong demand for their financial products, as evidenced by the upsize of the PAID 2025-5 deal from $400 million to $500 million.
- The latest PAID transaction, PAID 2025-5, has attracted 30 unique investors, four of whom are new to Pagaya’s capital markets program, indicating a growing interest in Pagaya's securitization offerings driven by technology.
