Pagaya Technologies is in the market with another $400 million in asset-backed securities (ABS) through the Pagaya AI Debt Trust, 2024-2, secured by unsecured consumer loans.
The latest securitization coincides with the company announcing a partnership with U.S. Bank to provide personal loans to borrowers who might not meet traditional underwriting criteria, according to media reports.
Known as PAID 2024-2, the transaction will issue class A through F notes to investors through at least eight tranches, according to the Asset Securitization Report's deal database. Pricing talk on the notes ranges from a spread of 150 basis points over the three-month interpolated yield curve on the A tranche to 200 bps over the same benchmark on the ABC tranche, according to the database.
Excess spread, a cash reserve account, overcollateralization provide credit enhancement to the deal, as does the capital structure's senior-subordinate repayment structure.
Analysts from Kroll Bond Rating Agency rated the notes, assigning AA to the A tranche; A- to the B tranche; BBB- to the C tranche; BB- to the D tranche; B- to the class E tranche; A- to the AB tranche; BBB- to the ABC tranche and B- to the DE tranche, according to ASR's database.
