Pagaya Technologies has closed its first Variable Funding Note facility with ATLAS SP Partners, establishing nearly $700 million in committed funding capacity for its personal loan platform as the financial technology company expands its long-term capital strategy.
ATLAS is the warehouse finance and securitized products business majority-owned by Apollo Funds.
The new revolving facility is designed to provide Pagaya with additional funding flexibility to support personal loan originations across its network.
Unlike a traditional asset-backed securitization, the VFN structure allows Pagaya to draw, repay, and redeploy capital as needed, providing a reusable source of committed liquidity rather than relying exclusively on individual securitization transactions.
Pagaya plans to use the facility to finance newly originated personal loans before they are securitized.
The dedicated warehouse structure gives the company a place to season loans while generating additional real-time performance data that can be used to inform future securitization execution.
Pagaya said the facility is also intended to support its AAA-rated PAID asset-backed securitization platform and further diversify the company’s broader securitization activities.
The transaction represents Pagaya’s first VFN and an additional step toward building a more diversified funding model incorporating warehouse facilities, securitizations, and other institutional sources of capital.
The company views committed revolving facilities as a way to improve funding visibility while supporting origination growth over multiple quarters.
The VFN functions similarly to a strategic credit facility, giving Pagaya the ability to access funding capacity as personal loans are originated and then replenish the facility as capital is repaid or assets move into securitization structures.
That model can reduce dependence on the timing of individual capital markets transactions while providing more predictable liquidity for continued originations.
Pagaya said the nearly $700 million targeted capacity will also give institutional capital partners direct exposure to a diversified pool of consumer credit originated through the company’s network.
The financing expands Pagaya’s relationships with institutional investors and structured credit providers as it seeks to increase the amount of committed capital available to support its AI-powered lending ecosystem.
Pagaya uses machine learning, proprietary data, and AI-driven underwriting technology to help financial institutions expand access to consumer credit and other financial products.
Its technology integrates with banks, lenders, and other financial services companies through APIs and capital solutions designed to connect borrowers with institutional funding.
ATLAS SP Partners provides financing, capital, advisory services, and structured credit solutions to institutional clients and other market participants.
The firm focuses on asset-backed and structured finance markets and provides customized capital for companies seeking alternatives to traditional financing structures.
For Pagaya, the VFN adds another layer of committed financing as the company works to scale originations while maintaining access to diversified institutional capital.
The company indicated that the ATLAS transaction could also serve as a starting point for expanding its warehouse relationships with additional banks and financing partners.
KEY QUOTE:
“Securing this VFN with ATLAS is the first step in expanding our warehouse capabilities with banks and other financing partners. As we expand our funding strategy with diverse sources of capital, we drive profitable growth with enhanced funding visibility.”
Jon Dobres, Chief Financial Officer Of Pagaya
