PayPal to sell $7 billion in BNPL loans to Blue Owl funds

SAN JOSE, Calif. - PayPal Holdings, Inc. (NASDAQ:PYPL) has entered into a two-year agreement with Blue Owl Capital (NYSE:OWL), a financial firm with strong fundamentals and a "GOOD" InvestingPro Financial Health score, under which funds managed by Blue Owl will purchase approximately $7 billion of buy now, pay later (BNPL) receivables originated by PayPal in the United States.

According to the agreement announced Wednesday, PayPal will maintain responsibility for all customer-facing activities, including underwriting and servicing, associated with its U.S. Pay in 4 BNPL products.

PayPal’s Pay in 4 service, launched in 2020, allows consumers to split eligible purchases into four interest-free payments over six weeks. The company processed more than $33 billion in BNPL payment volume globally in 2024, representing approximately 21% growth from 2023.

"This is another great step forward for PayPal and in line with our balance sheet-light model for credit," said Jamie Miller, Chief Financial & Operating Officer of PayPal. "This transaction reflects our disciplined approach to capital allocation."

Ivan Zinn, Head of Alternative Credit at Blue Owl, stated, "We are thrilled to partner with a leader in the BNPL space to bring this high-quality asset to our portfolio."

PayPal indicated that the transaction is already incorporated into its third quarter and full year 2025 guidance for earnings per share and transaction margin dollars announced on July 29, 2025.

Blue Owl Capital manages over $284 billion in assets as of June 30, 2025, across three multi-strategy platforms: Credit, Real Assets and GP Strategic Capital. The company has demonstrated robust performance with 31.8% revenue growth over the last twelve months and maintains an attractive 4.83% dividend yield. According to InvestingPro analysis, Blue Owl appears undervalued at current levels, with analysts maintaining a bullish outlook on the stock.

The announcement was made in a press release statement issued by both companies. For deeper insights into Blue Owl’s financials and growth prospects, including 10 additional ProTips and comprehensive valuation metrics, visit InvestingPro to access the full research report.

In other recent news, Blue Owl Capital Inc. reported impressive second-quarter 2025 earnings, with revenue reaching $703.11 million, surpassing the projected $591.51 million by 18.87%. Earnings per share were in line with expectations at $0.21. Additionally, Blue Owl Capital launched its first interval fund, the Blue Owl Alternative Credit Fund, securing $850 million in initial capital. This fund aims to provide individual investors access to alternative credit assets traditionally available to institutional investors.

In another development, Blue Owl Capital is nearing the completion of a $2.7 billion secondary transaction for its Dyal Capital Partners IV fund, involving both debt and equity financing. The transaction includes transferring minority stakes in private asset managers into a newly created vehicle with $1 billion in equity. Meanwhile, Wells Fargo maintained its Equal Weight rating on Blue Owl Capital, with a price target of $13.00. The firm noted some portfolio companies experienced notable unrealized marks, including National Dentex.

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