Pagaya and Castlelake expand partnership with $2.5 billion loan deal

NEW YORK - Pagaya Technologies Ltd. (NASDAQ:PGY), a fintech company with a market capitalization of $1.74 billion and impressive year-to-date returns of nearly 148%, announced Monday a new forward flow agreement with alternative investment firm Castlelake, L.P. for the purchase of up to $2.5 billion in personal loan assets over a 16-month period, subject to closing conditions. According to InvestingPro data, the company’s stock is trading near its 52-week high of $23.93, reflecting strong investor confidence.

The new agreement doubles the size of their previous partnership signed earlier in 2025, which committed up to $1 billion over 12 months. This expansion adds to Pagaya’s funding momentum, with the company reporting approximately $5 billion of expected capacity across its forward flow partnerships. The company has demonstrated strong operational execution, with revenue growth of 23.69% over the last twelve months and a healthy current ratio of 1.79, indicating solid financial stability.

"This agreement underscores the improving diversification and efficiency of our funding infrastructure, and bolsters our growth, earnings power, and cash flow profile," said Evangelos Perros, CFO of Pagaya, according to the press release.

John Lundquist, Partner at Castlelake, stated that the expanded partnership would provide their investors with "what we believe to be attractive risk-adjusted opportunities."

Pagaya, which uses artificial intelligence to power its lending platform, operates across three product verticals: personal loans, auto loans, and point of sale financing. The company’s technology connects lending partners with investors, enabling greater access to consumer credit.

The agreement with Castlelake specifically targets growth in Pagaya’s personal loan segment, including supporting volume increases from both new and existing lending partners.

Sanjiv Das, President and Co-Founder of Pagaya, noted in the statement that the "continued expansion of our funding program demonstrates Pagaya’s ability to consistently deliver attractive assets to investors."

The announcement comes as Pagaya pursues what it describes as a self-funded growth plan that does not require raising additional equity capital. For investors seeking deeper insights into Pagaya’s financial health and growth prospects, InvestingPro offers comprehensive analysis through its Pro Research Report, including detailed metrics, expert analysis, and future growth projections for tech-driven financial companies like Pagaya.

In other recent news, Pagaya Technologies reported impressive first-quarter 2025 earnings, significantly surpassing analyst expectations. The company achieved earnings per share of 69 cents, contrasting sharply with the forecasted loss of 17 cents, and revenue reached $290 million, exceeding projections. Pagaya also announced the launch of a $1 billion Point of Sale (POS) lending program, known as POSH, aimed at expanding their merchant and lending partner networks. Benchmark analysts have maintained a Buy rating for Pagaya, reflecting confidence in the company’s growth prospects. Additionally, Citizens JMP reiterated a Market Outperform rating with a $20 price target, following positive developments in Pagaya’s asset-backed securities (ABS) facility. During its Annual General Meeting, Pagaya’s shareholders voted to re-elect several directors and approved executive compensation packages, indicating investor confidence in the company’s leadership. These developments highlight Pagaya’s strategic initiatives and robust financial performance, positioning it for continued growth in the financial services sector.

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