Pagaya Strikes $1B Consumer Loan Agreement With Castlelake To Expand AI-Driven Loan Network

Author: Benzinga Newsdesk | August 09, 2024 07:06am

Pagaya Technologies LTD. (NASDAQ:PGY) ("Pagaya" or "the Company"), a global technology company delivering AI-driven product solutions for the financial ecosystem, and Castlelake, L.P. ("Castlelake"), a global alternative investment manager specializing in asset-based private credit and an experienced investor in consumer credit opportunities, today announced an agreement for Castlelake to purchase, subject to certain terms and conditions, an aggregate amount of up to $1 billion in consumer loans through the Pagaya network. Following satisfaction of the closing conditions, Castlelake will acquire loans on a monthly basis for an initial 12-month term, with the potential for the agreement to be extended for additional loan purchases over time.

This transaction expands and diversifies Pagaya's funding capacity, and adds a new, highly strategic funding partner to Pagaya's network of over 120 institutional investors. Funding mechanisms like forward flow represent a step-change in driving capital efficiency, by enabling Pagaya to fund loan originations with minimal use of its own capital. The Company expects to scale this initiative and others as it continues to diversify its funding by channels beyond its flagship pre-funded ABS program.

Posted In: PGY