Pagaya Technologies stock surges while closing largest auto ABS deal after upsizing from 400 million to 600 million driven by institutional investor demand in nonprime auto lending sector.
Aadi tracks the fintech beat for asset-backed securitization and AI lending platforms. An MBA graduate in marketing and finance, looks past the headlines to audit capital markets transactions and auto loan origination models. work covers nonprime lending structures and institutional investor participation in ABS markets.
Summary
- Pagaya Technologies bolstered capital markets presence by closing RPM 2026-3 auto ABS at 600 million, upsized 50% from original 400 million target.
- The New York-headquartered AI fintech secured AAA rating for third fully pre-funded auto ABS transaction of 2026.
- Transaction brings total pre-funded auto ABS raised by Pagaya in 2026 to 1.5 billion across three deals.
- Deal marks largest auto ABS transaction in company history while maintaining disciplined risk management approach.
- Pagaya cumulative ABS issuance now exceeds 36 billion across 86 transactions since 2018 with 165 institutional investors.
Pagaya Closes Largest Auto ABS Deal in Company History
Pagaya Technologies Ltd. (NASDAQ: PGY) closed RPM 2026-3, a 600 million auto asset-backed securitization transaction on May 26, 2026. The AAA-rated nonprime auto ABS deal was upsized from an original 400 million target due to institutional investor demand. The transaction represents Pagaya's third fully pre-funded auto ABS of 2026 and largest auto securitization in company history.
The board at Pagaya completed the fully pre-funded auto ABS structure to support nonprime auto loan originations at scale, according to regulatory filings accessed from the Securities and Exchange Commission. The deal brings total pre-funded auto ABS raised by the AI fintech in 2026 to 1.5 billion across three transactions.
The upsizing follows earlier auto ABS deployments in 2026. In March, Pagaya closed RPM 2026-1 at 400 million. The company completed RPM 2026-2 at approximately 500 million in the second quarter. With the additional 600 million, Pagaya has maintained an upsizing trajectory across its 2026 auto ABS program.
The infusion signals Pagaya's continued focus on capital markets financing at a time when nonprime auto lending has become a primary growth driver. Pagaya posted revenue of 298.99 million in Q1 2026, representing 10% year-over-year growth. The company reported net income of 25 million GAAP for the fifth consecutive profitable quarter.
Deal Structure and Investor Participation
The 600 million auto ABS transaction attracted primarily repeat institutional investors while also securing participation from new capital sources. Pagaya's RPM shelf program operates in its seventh year and continues to provide high-quality collateral serviced by leading auto lenders across the United States.
"Upsizing a deal in the current climate is a testament to our track record and the consistent execution of Pagaya's platform," said Sahil Chandiramani, Head of Capital Markets at Pagaya. "We remain focused on delivering fit-to-market structures for our investors while maintaining a disciplined approach to risk management."
The transaction operates as a fully pre-funded structure where capital flows directly to Pagaya's auto loan origination partners before loans are originated. This model differs from traditional ABS structures where loans are securitized after origination.
Founded in 2018 by Gal Krubiner and Yahav Yulzari, Pagaya Technologies provides AI-powered credit underwriting and risk management solutions for financial institutions. The company specializes in nonprime consumer lending across personal loans, auto financing, and point-of-sale credit programs.
Capital Markets Activity and ABS History
The New York-based company has maintained aggressive ABS issuance throughout 2026. In January, Pagaya closed an 800 million consumer loan ABS transaction. The company completed a 450 million auto securitization in March and secured 600 million through personal loan ABS PAID 2026-2 in April with participation from 27 institutional investors.
Since 2018, Pagaya has issued more than 36 billion across 86 ABS transactions with over 165 institutional investors. The company supports originations across personal loan, auto, and point-of-sale programs through its AI-powered credit platform.
At current auto ABS issuance rates, Pagaya maintains runway for sustained nonprime lending growth while managing institutional investor relationships across repeat transactions. The RPM shelf structure provides predictable access to capital markets funding for auto loan originations.
Leadership Changes and Market Position
The auto ABS closing coincides with executive appointments at Pagaya. Jonathan Dobres joins as Chief Financial Officer effective June 15, 2026. Terry O'Neil joined the company as Chief Credit Officer on May 21, 2026.
Robert McDonald serves as Managing Director and Head of Credit Solutions, overseeing the company's auto lending partnerships and ABS structuring activities. The leadership team manages capital deployment across multiple asset classes while maintaining risk management standards.
Pagaya competes directly with Upstart Holdings (NASDAQ: UPST) and LendingClub Corporation in AI-powered lending platforms. Traditional auto ABS issuers include Ally Financial and Capital One Financial Corporation.
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