Affirm has announced a new revolving pass-through loan sale facility in which PGIM Fixed Income, a Prudential Financial company, will invest up to $3 billion over 36 months by purchasing up to $500 million of Affirm loans at any one time.
This facility, which marks an expansion of the companies’ existing capital partnership, will support Affirm’s offering of pay-over-time options to consumers, the companies said in a Wednesday (June 18) press release.
“We are always in constant dialogue with our capital partners to better understand their needs and how we can deliver even more value to them,” Affirm Chief Capital Officer Brooke Major-Reid said in the release. “This first-of-its-kind facility for Affirm and PGIM does exactly that and demonstrates how we can utilize innovative structures to create winning partnerships.”
The companies’ partnership has also included PGIM’s private purchase of $500 million in Affirm loans in December and its previous investments in Affirm’s assets via asset-backed securitizations, according to the release.
“This agreement is a further testament to our commitment to finding durable sources of risk-adjusted returns for our clients through our selective origination process,” Edwin Wilches, co-head of securitized products at PGIM Fixed Income, said in the release. “This innovative pass-through facility showcases our ability to find attractive opportunities across public and private markets and how our access to diverse pools of capital can deliver value to our partners.”
Affirm has issued 23 asset-backed securitizations totaling $11.5 billion with participation from more than 150 capital partners, according to the release.
As of March 31, the company’s funding capacity increased for nine consecutive quarters and reached $23.3 billion, per the release.
Affirm said in January that it formed an expanded capital partnership with Liberty Mutual Investments. The companies upsized an existing forward flow loan purchase program so that through June 2027, LMI will purchase Affirm’s installment loans on a forward flow basis, in amounts up to $750 million outstanding.
In December, Affirm and global investment firm Sixth Street said they formed a long-term capital partnership in which Sixth Street will invest up to $4 billion by purchasing Affirm loans in a three-year forward flow agreement.
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