Affirm obtains securitisation of its POS instalment loans

Karthik Subramanian

Affirm, the payment network that specializes in BNPL has announced a $500 million securitization of its POS installment loans, in a move that is expected to help with user growth in the future.

The company has reported that it has seen some very strong demand from the investors for this offering which shows how the investors view the company and its potential for growth as the BNPL segment is hot in the market right now and the momentum is expected to be kept up in the coming months as well.

“Our capital strategy continues to be an important point of competitive differentiation for Affirm as our ABS program builds upon its already strong execution,” said Affirm Chief Financial Officer Michael Linford in the release. “Our 2021-B securitization was our most efficient execution to date and provides us with even greater flexibility to support our growth in 2021 and beyond. We appreciate the exceptionally strong investor demand for this offering and the confidence in our platform from our large, diversified group of institutional capital partners.”

The company does this securitization regularly and it is reported that this is the sixth such securitization since the launch of the program in 2020 and each of these efforts has been met with good demand from the investors who seem to lap up the debt that the installment loans offer.

This is a further boost to the company which had recently tied up with Apple for the launch of Apple’s BNPL products in Canada. We had reported the Apple had planned to use Affirm’s Paybright for this purpose which should be a big boost for the company and set it up very well as it can use this opportunity to onboard even more customers on to its platform who are then likely to use it for many more products beyond the Apple universe.

The BNPL segment has been growing very strongly and hence it comes as so surprise that these securitization notes are being lapped up by investors as they expect that the growth would continue. Big players like Klarna, Paypal, and Apple have either entered this space already or are in the process of entering this space which should make it an attractive one for investors now and in the future as well.

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