Pagaya Technologies Ltd. announced the successful closing of its upsized offering of $500 million of 8.875% senior unsecured notes due 2030. The offering was approximately five times oversubscribed, backed by strong demand from leading institutional investors. This transaction marks Pagaya as one of the first fintechs to access the high-yield unsecured debt markets.
Net proceeds from the offering will be primarily used to refinance existing higher-cost term loans and other secured borrowings. This refinancing is expected to generate approximately $40 million of annualized cash flow savings, based on Q1 2025 performance. These savings include about $30 million in reduced debt amortization and approximately $12 million in annual interest expense reduction.
The transaction is projected to lower Pagaya’s cost of debt by nearly 200 basis points while maintaining generally flat net leverage. CFO Evangelos Perros stated that this move strengthens the financial foundation, accelerates profitability, and unlocks shareholder value by replacing higher-cost secured debt with long-term unsecured capital. Pagaya is now rated by S&P, Moody’s, and Fitch.
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