Pagaya Technologies Ltd.PGY
Pagaya Technologies Ltd. Debt Disclosure
BORROWINGS
The following table sets forth the Company’s outstanding borrowings as of the date indicated (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||
| Secured borrowing | $ | 193,892 | $ | 176,089 | |||||||
| Exchangeable notes | $ | 148,782 | $ | 146,342 | |||||||
| Long-term debt | $ | 481,598 | $ | 321,317 | |||||||
The Company was in compliance with all covenants as of December 31, 2025 and December 31, 2024.
Secured Borrowing
Secured borrowings are comprised of risk retention master repurchase agreements and receivable facilities. Interest expenses related to secured borrowings totaled $22.2 million for the year ended December 31, 2025, compared to $47.1 million for the year ended December 31, 2024.
During the third quarter of 2025, the Company has repaid $153.9 million of secured borrowing, following the issuance of the 2030 Notes. As a result of these transactions, the Company has incurred a loss of $1.4 million related to the write-off of deferred issuance costs reported within “Gains and (losses) from extinguishment of debt” in the consolidated statements of operations.
The following table sets forth the Company’s outstanding secured borrowings as of the date indicated (in thousands, except percentage):
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
Outstanding Balance | Interest Rate (1) | Outstanding Balance | Interest Rate (1) | ||||||||||||||||||||
Risk Retention Master Repurchase - Recourse | $ | 53,722 | 13% | $ | 115,298 | 17% | |||||||||||||||||
Risk Retention Master Repurchase - Non-Recourse | 53,584 | 6% | 28,987 | 7% | |||||||||||||||||||
Receivables Facility - Recourse | 22,427 | 8% | — | —% | |||||||||||||||||||
Receivables Facility - Non-Recourse | 64,159 | 6% | 31,804 | 8% | |||||||||||||||||||
Total principal balance under secured borrowings | $ | 193,892 | $ | 176,089 | |||||||||||||||||||
(1) The interest rate is weighted based on the outstanding principal balance and interest rates in effect as of December 31, 2025 and 2024
Risk Retention Master Repurchase
In normal course of business, the Company, through consolidated VIEs, enters into repurchase agreements to finance the Company’s risk retention balance in notes and certificates retained from securitization transactions. Under these agreements, the Company pledges financial instruments as collateral. These agreements with counterparties generally contain contractual provisions allowing the counterparty the right to sell or repledge the collateral. Pledged securities owned that can be sold or repledge by the counterparty are included in Investments in loans and securities in our balance sheet. As of December 31, 2025 and December 31, 2024, the outstanding principal balance under the repurchase agreements was $107.3 million and $144.3 million, respectively, with a weighted average interest rate of approximately 10% and 15%, respectively. The average remaining contractual maturities of the repurchase agreements were greater than 90 days as of both December 31, 2025 and December 31, 2024.
Receivables Facility
In April 2025, Pagaya Structured Products LLC, a wholly-owned subsidiary of the Company, entered into a Loan and Security Agreement (the “LSA Agreement”) with certain lenders. This agreement established a 24-month Capitalized Interest Amounts Facility (the “CIA Facility”) with a maximum principal amount of $24 million to finance eligible capitalized interest amounts related to sponsored securitization transactions. Additionally, in June 2025, Pagaya Structured Products LLC entered into a 30-month Accrued Loan Purchasing Fee Receivables Facility (the “ALPF Facility”) with a maximum principal amount of $65 million, to finance certain eligible receivables from sponsored securitization transactions. Borrowings under the CIA Facility bear interest at a rate per annum equal to the adjusted term SOFR (subject to a 1.00% floor) plus a margin of 4.00%, while borrowings under the ALPF Facility bear interest at a rate per annum equal to the adjusted term SOFR (subject to a 1.00% floor) plus a margin of 1.9%. As of December 31, 2025, the combined outstanding principal balance under the CIA Facility and ALPF Facility was $86.6 million, which is recorded within secured borrowing on the consolidated balance sheets.
In June 2025, Pagaya Receivables LLC, a wholly-owned subsidiary of the Company, repaid the outstanding balance of a 3-year loan facility (the “SVB Receivables Facility”) and terminated the related Loan and Security Agreement, which was originally executed in October 2022. Borrowings under the SVB Receivables Facility bear interest at a rate per annum equal to the adjusted term SOFR (subject to a 0.00% floor) plus a margin of 3.50%. As of December 31, 2024, the outstanding principal balance under the SVB Receivable Facility was $31.8 million, which is recorded within secured borrowing on the consolidated balance sheets. As of December 31, 2025, there was no outstanding balance under the SVB Receivable Facility, and the facility was no longer in effect.
Exchangeable Notes
On October 1, 2024, the Company, through a wholly owned subsidiary of the Company, issued $160 million aggregate principal amount of its 6.125% Exchangeable Notes due 2029 (the “2029 Notes”). The issuance was in connection with a purchase agreement dated September 26, 2024, with certain initial purchasers. The 2029 Notes bear interest at a rate of 6.125% per annum, payable semiannually in arrears on April 1 and October 1 of each year, beginning April 1, 2025. The 2029 Notes will mature on October 1, 2029, unless earlier repurchased, redeemed, or exchanged.
The initial exchange rate of the 2029 Notes is 71.4669 Class A Ordinary Shares per $1,000 principal amount of 2029 Notes (equivalent to an initial exchange price of approximately $13.99 per Class A Ordinary Share). The exchange rate is subject to customary adjustments upon the occurrence of certain events but will not be adjusted for any accrued and unpaid interest. In addition, if certain corporate events that constitute a “make-whole fundamental change” (as defined in the 2029 Notes Indenture)
occur, then the Company will, in certain circumstances, increase the exchange rate for 2029 Notes exchanged during a specified period of time.
Prior to the close of business on the business day immediately preceding July 2, 2029, the 2029 Notes will be exchangeable at the option of the holders only upon the satisfaction of one or more specified conditions. These conditions include, among others, the sale price of the Class A Ordinary Shares exceeding 130% of the initial exchange price for a specified number of trading days (such condition, the “Sales Price Contingent Exchange Condition”). On or after July 2, 2029 until the close of business on the second scheduled trading day immediately preceding October 1, 2029, the 2029 Notes will be exchangeable at the option of the holders at any time regardless of the specified conditions.
During the third quarter of 2025, the Sales Price Contingent Exchange Condition was met as the closing sale price of the Company’s Class A Ordinary Shares exceeded 130% of the exchange price for the required period and, as a result, noteholders have been entitled to exchange their 2029 Notes. As of December 31, 2025, no holders have elected to exchange their 2029 Notes.
The 2029 Notes will be redeemable, in whole or in part (subject to certain limitations described below), at the option of the Company at any time, and from time to time, on or after October 5, 2027 and on or before the 41st scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if (i) the 2029 Notes are “Freely Tradable” (as defined in the 2029 Notes Indenture), and all accrued and unpaid additional interest, if any, has been paid in full as of the first interest payment date occurring on or before the related “Redemption Notice Date” (as defined in the 2029 Notes Indenture); and (ii) the last reported sale price per Class A Ordinary Share exceeds 130% of the exchange price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the related Redemption Notice Date; and (2) the trading day immediately before the Redemption Notice Date. However, the Company may not redeem less than all of the outstanding 2029 Notes unless at least $50.0 million aggregate principal amount of 2029 Notes are outstanding and not called for redemption as of the related Redemption Notice Date. In addition, calling any 2029 Note for redemption will constitute a make-whole fundamental change with respect to such 2029 Note called for redemption, in which case the exchange rate applicable to the exchange of such 2029 Note called for redemption will be increased in certain circumstances if it is exchanged during the related “Redemption Exchange Period” (as defined in the 2029 Notes Indenture).
If the Company undergoes a “Fundamental Change” (as defined in the 2029 Notes Indenture), subject to certain conditions and except as set forth in the Indenture, holders may require the Company to repurchase for cash all or any portion of their 2029 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2029 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
The Company accounted for the issuance of the 2029 Notes as a single liability at par as the conversion feature does not require bifurcation as a derivative under ASC 815 and the 2029 Notes were not issued at a substantial premium. Debt issuance costs, consisting of underwriting fees and third-party offering costs, totaled $6.2 million. Original Issue Discount (“OID”) totaled $8.0 million. Both issuance costs and OID are amortized to interest expense using the effective interest method over the contractual term of the 2029 Notes. For year ended December 31, 2025 and 2024, the Company recorded $12.4 million and $3.1 million of interest expense, respectively, which included $2.4 million and $0.6 million related to the amortization of debt issuance costs and OID. The effective interest rate of the 2029 Notes is 8.7%.
The estimated fair value of the 2029 Notes as of December 31, 2025 and December 31, 2024 was approximately $292.4 million and $163.4 million, respectively, which represent Level 2 valuations in the fair value hierarchy. The estimated fair value was determined based on the estimated or actual bids and offers of the 2029 Notes in an over-the-counter market.
Long-Term Debt
Senior Notes
On July 28, 2025, the Company, through Pagaya US Holding Company LLC (“Pagaya US”), issued $500 million aggregate principal amount of 8.875% Senior Unsecured Notes due 2030 (the “2030 Notes”). The 2030 Notes will accrue interest at a rate of per annum, payable semi-annually in arrears on February 1 and August 1 of each year, beginning on February 1, 2026. The 2030 Notes will mature on August 1, 2030, unless earlier repurchased or redeemed.
The 2030 Notes will be redeemable at the option of the Company. At any time prior to August 1, 2027, the Company may redeem the 2030 Notes, in whole or in part, at its option at a redemption price equal to 100% of the principal amount of the 2030 Notes plus a make-whole premium described in the 2030 Notes Indenture, plus accrued and unpaid interest, if any, to, but not including, the redemption date. On and after August 1, 2027, the Company may redeem the 2030 Notes, in whole or in part, at the redemption prices set forth in the 2030 Notes Indenture.
The following table details the Company’s 2030 Notes as of December 31, 2025 (in thousands):
| December 31, 2025 | |||||
| Principal amount | $ | 493,085 | |||
| Less: Unamortized issuance costs | (11,487) | ||||
| Carrying amount | $ | 481,598 | |||
The Company recorded $20.3 million of interest expense, including $1.1 million of amortization of debt issuance costs, for the three months ended December 31, 2025.
In December 2025, the Company repurchased $6.9 million aggregate principal amount of the outstanding 2030 Notes at a price equal to 87.4% of the principal amount. The Company paid total consideration of $6.0 million, excluding accrued interest, resulting in a $0.7 million net gain on extinguishment of debt. This gain is net of the written-off carrying value, which included associated pro rata unamortized debt issuance costs, is reported within “Gains and (losses) from extinguishment of debt” in the consolidated statements of operations. Following the repurchase, the remaining aggregate principal amount of the 2030 Notes outstanding was $493.1 million as of December 31, 2025.
Credit Agreement
On February 2, 2024, the Company entered into a certain Credit Agreement (the “Credit Agreement”) which provides for a 5-year senior secured revolving credit facility (the “Revolving Credit Facility”) in an initial principal amount of $25 million which subsequently increased to $35 million, and a 5 year senior secured term loan facility (the “Term Loan Facility,” and together with the Revolving Credit Facility, the “Facilities”) in an initial principal amount of $255 million. Borrowings under the Facilities bear interest at a rate per annum equal to, at the Company’s option, (i) a base rate (determined based on the prime rate and subject to a 2.00% floor) plus a margin of 6.50% or (ii) an adjusted term Secured Overnight Financing Rate (subject to a 1.00% floor) plus a margin of 7.50%.
In November 2024, the Company entered into Amendment No. 2 (the “Amendment”) to the Credit Agreement. Pursuant to the Amendment, the Company incurred incremental term loans in an aggregate principal amount $100 million, bringing the total principal amount of the Term Loan Facility to $355 million. The Company also increased an aggregate principal amount of the Revolving Credit Facility of $15 million, bringing the total principal amount of the Revolving Credit Facility to $50 million. In February 2025, the Company further increased the aggregate principal amount of the Revolving Credit Facility by $8 million, resulting in a total principal amount of $58 million. As of December 31, 2024, the Company had letters of credit issued in the amount of $24.3 million and $25.7 million of remaining capacity available under the Revolving Credit Facility.
In July 2025, the Company fully paid off the outstanding principal balance under the Credit Agreement using the proceeds from the issuance of the 2030 Notes, as discussed above. As a result of this transaction and the repayment of outstanding balance under the Credit Agreement, the Company has incurred a loss of $23.9 million during the year ended December 31, 2025, related to the write-off of deferred issuance costs and an early payment penalty, reported within “Gains and (losses) from extinguishment of debt” in the consolidated statements of operations. As of December 31, 2025, there was no outstanding balance under the Credit Agreement, and the Credit Agreement was no longer in effect.
2025 Revolving Credit Facility
On October 1, 2025, the Company refinanced the Revolving Credit Facility by way of terminating Credit Agreement and entering into a new three-year revolving credit facility (the “2025 Revolving Credit Facility”) with a syndicate of financial institutions. The 2025 Revolving Credit Facility provides a committed borrowing capacity of $132 million. Borrowings under the 2025 Revolving Credit Facility bear interest at a rate per annum equal to, at the Company’s option, (i) a base rate (determined based on the prime rate and subject to 1.00% floor) plus a margin of 2.50% and (ii) an adjusted term SOFR (subject to 1.00% floor) plus a margin of 3.50%, a reduction from the prior revolving credit facility’s rate of SOFR plus 7.50%. A commitment fee accrues on any unused portion of the commitments under the 2025 Revolving Credit Facility at a rate per annum of 0.25% and is payable quarterly in arrears. The terms and conditions of the 2025 Revolving Credit Facility include customary covenants and restrictions.
As of December 31, 2025, the Company had letters of credit issued in the amount of $115.9 million and $16.1 million of remaining capacity available under the 2025 Revolving Credit Facility.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Mar 12, 2025 | |
| 2023 | Apr 25, 2024 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.