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KBRA Assigns Preliminary Ratings to Pagaya AI Debt Grantor Trust 2025-1 and Pagaya AI Debt Trust 2025-1

1. KBRA assigns ratings to 11 classes of Pagaya's debt notes. 2. Initial credit enhancement levels range from 87.15% to 3.25%. 3. Pagaya Technologies utilizes AI and big data in lending. 4. The transaction is Pagaya's 33rd publicly rated securitization.

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Why Bullish?

Strong credit ratings may enhance investor confidence in Pagaya. Previous positive actions by credit agencies have generally led to stock uplifts.

How important is it?

The article impacts Pagaya’s market perception and potential investment appeal significantly.

Why Short Term?

Near-term reaction expected due to credit rating announcements influencing immediate market perceptions.

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PGY
NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to 11 classes of notes issued by Pagaya AI Debt Grantor Trust 2025-1 and Pagaya AI Debt Trust 2025-1 (collectively “PAID 2025-1”), an unsecured consumer loan ABS transaction. PAID 2025-1 has initial hard credit enhancement levels of 87.15% for the Class A-1 Notes to 3.25% for the Class F Notes. Credit enhancement is comprised of overcollateralization, subordination (except for the Class F Notes), a cash reserve account funded at closing, and excess spread. PAID 2025-1 will issue 12 classes of notes totaling $491.0 million with KBRA rating the Class A-1 through Class F Notes, Class A, Class AB, Class ABC and Class ABCD Notes. KBRA will not be providing ratings on the Certificates or the FR Securities. PAID 2025-1 is a fully prefunded transaction where there will be no collateral funded at closing. Pagaya Structured Products LLC, the sponsor and administrator, is a 100% owned subsidiary of Pagaya US Holding Company LLC (formerly known as Pagaya Investments US LLC), which is a 100% owned subsidiary of Pagaya Technologies Ltd. (“Pagaya Technologies”), an Israeli corporation listed on the NASDAQ (PGY). Pagaya Technologies is a financial technology company in the lending marketplace that uses machine learning, big data analytics, and AI-driven credit and analysis technology. This transaction is the 33rd publicly rated securitization sponsored by Pagaya Structured Products LLC (collectively with its affiliates, “Pagaya” or the “Company”). KBRA applied its Consumer Loan ABS Global Rating Methodology, as well as its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology as part of its analysis of the transaction’s proposed capital structure and Pagaya’s historical static pool data. KBRA considered its operational reviews of Pagaya and each of the Platform Sellers, as well as periodic update calls with the Company and Platform Sellers. KBRA has recently conducted surveillance on each platform’s KBRA-rated securitizations. Operative agreements and legal opinions will be reviewed prior to closing. To access ratings and relevant documents, click here. Click here to view the report. Methodologies ABS: Consumer Loan ABS Global Rating Methodology Structured Finance: Global Structured Finance Counterparty Methodology ESG Global Rating Methodology Disclosures Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above. A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here. Information on the meaning of each rating category can be located here. Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com. About KBRA Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S. Doc ID: 1007686

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