Investor demand is increasing in the private credit asset-backed market – as private credit funds need to deploy the large capital pools they have raised from their own investors.
SoFi announced a $525m securitization agreement with PGIM.
The assets being funded are personal loans originated by SoFi.
SoFi is a US digital bank founded in 2011.
PGIM is the asset-management arm of US life insurance company Prudential. PGIM manages over $1.4tn. Its securitization (public an private combined) assets under management is $120bn.
This looks like the start of a series of transactions for PGIM and SoFi. They did a similar $350m private securitization of personal loans together in May 2024.
The relationship provides PGIM with a regular place that it can deploy investor funds. It gives SoFi confidence to be able to originate more loans at competitive pricing – with the knowledge that it is likely to be able to fund the new loans at a profitable funding rate through these private securitization transactions.
Edwin Wilches, Co-Head of Securitized Products at PGIM Fixed Income: “we continue to expand our platform as an asset-based finance lender and source investments that provide compelling risk-adjusted returns for our clients”.
Anthtony Noto, CEO of SoFi: “the investor demand we see for SoFi’s personal loans underscores the quality and strength of our lending business, which continues to contribute meaningfully to our durable growth”.
This category of private loan funding transactions is likely to continue to grow quickly – most rapidly in the US but also in Europe and Asia.