"The transaction suggests that Pagaya's AI-selected loan portfolios have performed well enough to attract a second round of institutional capital, indicating a growing trust in AI-driven financial models."
"Resecuritization, the practice of refinancing pools of loans that have already been through one round of securitisation, is common in prime mortgage markets but rare in subprime auto lending."
"For Pagaya, the resecuritization programme unlocks a new layer of capital efficiency, allowing the company to recycle capital by refinancing existing portfolios."
Pagaya Technologies completed a $450 million auto resecuritization transaction, the first under its Research-Driven Pagaya Motor shelf. This deal bundles receivables from previous RPM transactions, indicating strong performance of AI-selected loan portfolios. Resecuritization is common in prime mortgage markets but rare in subprime auto lending, especially with machine-learning models. The transaction enhances capital efficiency for Pagaya, allowing the recycling of capital through refinancing, thus extending the life of loans managed by AI.
Read at TNW | Fintech-Ecommerce
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