Klarna raises $518M in second securitization to back $12B in lending
What's the deal? Klarna has completed a $518 million Significant Risk Transfer (SRT), freeing up capital to support $12 billion in additional lending. The three-year agreement is part of the digital bank's wider capital-efficiency program.
Why now? Klarna says demand for its products keeps growing, and the deal lets it fund that demand without tying up as much of its own capital. It is the second SRT Klarna has completed with the same investor.
What's the endgame? The program pairs SRTs with forward-flow and warehouse financing to fuel growth in what Klarna calls a "capital-lighter way." The New York-listed bank counts over 119 million active users and processes 3.4 million transactions per day.
What could go wrong? The model leans on continued institutional appetite for exposure to Klarna's lending. A pullback in that demand would make funding consumer credit costlier.
The signal: An existing investor returning for a second round points to confidence in Klarna's underwriting. "Demand for our products continues to grow and transactions like this let us fund it efficiently, while an existing investor returning for a second securitization is a real vote of confidence in the quality of our underwriting," chief financial officer Niclas Neglén said.
Read more: AP News
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