Pagaya Expands Capital Markets Platform with Landmark $350 Million Revolving Personal Loan ABS Backed by 26North
Pagaya Technologies LTD. a global financial technology company delivering artificial intelligence-powered product solutions across the consumer credit ecosystem, has taken a significant step forward in the evolution of its funding strategy with the successful closing of PAID 2025-REV1, a $350 million asset-backed securitization backed by personal loans originated through the Pagaya network. The transaction represents a strategic milestone for the company, marking the first revolving asset-backed securitization issued within Pagaya’s personal loan business and reinforcing its position as a leading innovator in consumer credit structuring. By introducing a revolving format to its personal loan ABS offerings, Pagaya is expanding the depth, flexibility, and durability of its funding platform while unlocking new opportunities for institutional investors seeking scalable exposure to high-quality consumer credit assets.
Establishing a New Long-Term Capital Channel for Personal Loans
The PAID 2025-REV1 transaction establishes a new form of long-term capital for Pagaya that complements its market-leading public ABS issuance program. Historically, Pagaya has been recognized for its ability to consistently access public securitization markets across multiple consumer credit verticals, providing its lending partners with reliable funding even during periods of macroeconomic volatility. This latest transaction builds on that foundation by adding a revolving structure designed to enhance capital efficiency and reinvestment flexibility. Unlike traditional term ABS transactions that amortize over time, the revolving structure allows principal repayments to be redeployed into new loan originations during the revolving period, creating a more dynamic and scalable funding solution for Pagaya’s rapidly growing personal loan platform.
Strategic Partnership with 26North Signals Institutional Confidence
The inaugural revolving personal loan ABS was completed in partnership with affiliates of 26 North Partners LP, an alternatives-focused investment platform with expertise across private credit and structured finance. The collaboration underscores growing institutional confidence in Pagaya’s AI-driven underwriting capabilities, asset performance, and disciplined approach to risk management. By partnering with 26North on this first-of-its-kind structure, Pagaya has aligned itself with a capital provider that shares its long-term perspective on consumer credit innovation and portfolio construction. The partnership also reflects a broader trend of asset managers seeking differentiated, technology-enabled exposure to consumer lending markets through bespoke and thoughtfully engineered securitization structures.
Designed Specifically for Insurance Capital and Asset Managers
PAID 2025-REV1 was structured by Pagaya’s in-house Capital Markets team with a clear focus on meeting the needs of insurance companies and institutional asset managers. These investors often prioritize stable cash flows, attractive risk-adjusted returns, and reinvestment opportunities within a liquid security format. The revolving nature of the transaction directly addresses these objectives by allowing capital to be redeployed as loans pay down, enhancing portfolio longevity and yield potential. By offering a 24-month revolving period, the structure provides investors with sustained exposure to consumer credit assets while maintaining transparency, predictability, and alignment with regulatory and capital allocation requirements common among insurance-focused investors.
Revolving Structure Doubles Effective Funding Capacity
One of the most compelling features of the PAID 2025-REV1 transaction is its ability to effectively double total funding capacity over the life of the deal. While the initial issuance size stands at $350 million, the 24-month revolving period enables Pagaya to reinvest repayments into new personal loans, resulting in total funding capacity of up to approximately $700 million. This amplified impact underscores the strategic importance of revolving ABS structures as a capital-efficient solution that supports sustained loan origination without the need for repeated market issuance. For Pagaya, this means greater continuity of funding for its lending partners and enhanced scalability across its personal loan segment.
Supporting Pagaya’s Network-Driven Lending Model
Pagaya operates a network-driven lending model that connects financial institutions with AI-powered credit decisioning and funding solutions. The success of this model depends on the company’s ability to consistently provide capital that matches the growth ambitions of its lending partners. The introduction of a revolving personal loan ABS directly supports this objective by creating a stable, reusable source of funding that can adapt to changes in loan demand and market conditions. As lending partners originate loans through the Pagaya network, the revolving structure ensures that capital remains available to support ongoing growth, reinforcing Pagaya’s value proposition as a long-term strategic partner rather than a transactional funding source.
Leveraging AI to Enhance Asset Quality and Performance
At the core of Pagaya’s platform is its proprietary artificial intelligence technology, which analyzes vast datasets to assess credit risk, optimize pricing, and improve loan performance. The loans backing the PAID 2025-REV1 transaction benefit from this AI-driven approach, which has been refined through years of data collection and model development across multiple credit cycles. By embedding AI into the underwriting and monitoring process, Pagaya aims to deliver more resilient portfolios that perform consistently across varying economic environments. This technological edge is particularly valuable in the context of a revolving ABS, where ongoing asset replenishment requires disciplined credit selection to maintain portfolio quality over time.
Capital Markets Expertise Drives Product Innovation
Pagaya’s Capital Markets team has played a central role in bringing the PAID 2025-REV1 structure to market. Drawing on deep experience in structured finance, the team designed a product that balances investor requirements with the operational realities of consumer loan origination. According to Sahil Chandiramani, Head of Capital Markets at Pagaya, the structure was intentionally created in a liquid security format with features tailored to insurance capital and asset managers seeking attractive carry and reinvestment potential. The emphasis on market-ready, investor-centric design reflects Pagaya’s broader philosophy of aligning innovation with real-world capital needs, ensuring that new products gain traction and scale effectively.
Building Sustainable Funding for Lending Partner Growth
Sustainable funding is a critical enabler of growth for consumer lenders, particularly in an environment characterized by interest rate uncertainty and evolving regulatory expectations. Pagaya’s revolving personal loan ABS provides a solution that supports disciplined expansion without exposing lending partners to funding disruptions. By offering a predictable source of capital that can be recycled over time, Pagaya enables its partners to focus on customer acquisition, product development, and risk management rather than short-term funding constraints. This stability is expected to be especially valuable as Pagaya continues to onboard new lending partners across its platform.
Expansion Plans Across Multiple Loan Verticals
Looking ahead, Pagaya expects to onboard several new lending partners in 2026 across its personal loan, auto loan, and point-of-sale loan segments. The revolving ABS structure introduced with PAID 2025-REV1 is anticipated to play a key role in supporting this expansion, particularly within the personal loan market. By replicating and refining structures that have proven successful in other verticals, Pagaya is building a cohesive and adaptable funding architecture capable of supporting diverse credit products. This cross-vertical approach enhances operational efficiency while allowing Pagaya to respond quickly to shifts in consumer demand and partner needs.
Building on Success in Point-of-Sale ABS Structures
The new personal loan revolving ABS structure shares similarities with point-of-sale ABS transactions that Pagaya launched in 2025. Those earlier deals demonstrated the effectiveness of revolving formats in providing efficient and sustainable funding for consumer credit products tied to merchant and retail ecosystems. By applying similar principles to personal loans, Pagaya is leveraging proven structural concepts while tailoring them to the unique characteristics of unsecured consumer credit. This iterative approach to product development highlights Pagaya’s ability to innovate while maintaining consistency and reliability across its securitization platform.
Navigating Market Uncertainty Through Disciplined Growth
The launch of PAID 2025-REV1 comes at a time when global financial markets continue to grapple with uncertainty driven by macroeconomic pressures, shifting monetary policy, and evolving investor risk appetites. Against this backdrop, Pagaya has emphasized disciplined growth and product innovation as cornerstones of its strategy. Evangelos Perros, Chief Financial Officer of Pagaya, noted that the company is entering the year with a focus on highly disciplined expansion, leveraging its leadership in consumer credit structuring to diversify funding sources and strengthen its lending partner network. This approach reflects a commitment to balancing growth ambitions with prudent risk management.
Diversifying Funding and Strengthening Resilience
Funding diversification is a recurring theme in Pagaya’s capital strategy, and the revolving personal loan ABS represents a meaningful step toward greater resilience. By expanding beyond traditional term securitizations and incorporating structures that appeal to a broader range of institutional investors, Pagaya is reducing its reliance on any single funding channel. This diversification enhances the company’s ability to navigate periods of market stress while continuing to support loan origination across its network. Over time, a more diversified funding base is expected to contribute to improved cost of capital and greater strategic flexibility.
Alignment with an Alternatives-Focused Investment Partner
The partnership with 26North reflects a strong strategic alignment between Pagaya and an investment platform focused on alternative credit opportunities. 26North’s expertise in structured products and private credit complements Pagaya’s technology-driven approach to consumer lending, creating a partnership that extends beyond a single transaction. Both organizations share a long-term view of the consumer credit market and a commitment to innovative structures that deliver value to investors while supporting responsible lending. This alignment is expected to lay the groundwork for future collaborations as Pagaya continues to expand its capital markets offerings.
Reinforcing Pagaya’s Role as a Consumer Credit Innovator
With the successful closing of PAID 2025-REV1, Pagaya has reinforced its reputation as a pioneer in consumer credit innovation. The introduction of a revolving personal loan ABS demonstrates the company’s ability to anticipate investor needs, adapt proven structures to new asset classes, and execute complex transactions at scale. As competition in the fintech and consumer lending space intensifies, Pagaya’s differentiated approach to funding and risk management serves as a key competitive advantage. By combining AI-driven underwriting with sophisticated capital markets execution, the company is well positioned to shape the future of consumer credit financing.
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 an 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.
About 26North
26North Partners LP is an integrated, multi-asset-class investment platform founded by Josh Harris that provides investment advice and opportunities to its clients across private equity, credit, insurance, and reinsurance strategies. The 26North team brings decades of experience managing third-party capital to help clients achieve their financial goals while making a lasting impact on the communities in which they operate .Since launching in 2022, 26North has grown to approximately $32 billion in assets under management.
