Three years ago, institutional investors took a leap of faith when they purchased bonds backed by auto loans that an algorithm had selected. Now Pagaya Technologies is asking them to do it again, with the very same loans.
The Israeli-founded, New York-headquartered fintech announced on Monday that it has closed a $450 million auto resecuritization transaction, the first refinancing deal under its Research-Driven Pagaya Motor (RPM) shelf. According to a press release, the deal, designated RPM 2026-R1, bundles receivables that were originally securitised through three earlier RPM transactions from 2023 and 2024, repackaging them into fresh notes for capital-markets investors.
It is, by any measure, a milestone. Resecuritization, the practice of refinancing pools of loans that have already been through one round of securitisation, is common in prime mortgage markets but rare in subprime auto lending, and rarer still when the underlying credit decisions were made by a machine-learning model rather than a human underwriter.
Why resecuritization matters
The transaction suggests that Pagaya's AI-selected loan portfolios have performed well enough to attract a second round of institutional capital, AI startups reshaping enterprise infrastructure are increasingly proving their models in capital markets. Rating agency KBRA, which assigned preliminary ratings to six classes of notes totalling roughly $442 million in mid-March, confirmed that the receivables had originally been packaged in RPM 2023-3, RPM 2023-4, and RPM 2024-1. The deal represents the 59th publicly rated securitisation sponsored by Pagaya's structured-products arm.
For Pagaya, the resecuritization programme unlocks a new layer of capital efficiency. Rather than holding seasoned loan pools to maturity or selling them at a discount, the company can recycle capital by refinancing existing portfolios, effectively extending the useful life of every loan its AI touches. In an environment where auto ABS performance is projected to weaken in 2026, according to analysts at KBRA and S&P Global, demonstrating that investors will refinance AI-originated paper is a powerful signal.
A year of relentless issuance
The RPM 2026-R1 deal lands in the middle of an aggressive capital-markets campaign. In February, Pagaya kicked off 2026 with an $800 million consumer-loan ABS. In March, it closed RPM 2026-1, a $400 million standard auto securitisation that attracted more than 20 investors, the majority of them returning participants. The company has also established a $700 million revolving funding facility backed by personal loans, built with investment from 26North, and sealed a forward-flow arrangement worth up to $500 million with asset manager Castlelake.
Since 2018, Pagaya has completed 83 securitisation, raising more than $34 billion in capital to fund loans originated through its partner network. Its investor base now exceeds 150 institutions.
The numbers behind the platform
Pagaya reported $1.3 billion in revenue for 2025, a 26 per cent increase year on year, alongside $371 million in adjusted EBITDA and $81 million in GAAP net income, its fourth consecutive profitable quarter. CEO Gal Krubiner has guided for revenue between $1.4 billion and $1.575 billion in 2026, while signalling a deliberate pullback from higher-risk credit segments in favour of disciplined risk management and measured volume growth.
That restraint may be strategic. Auto ABS delinquency rates have been climbing, particularly in the non-prime segment where Pagaya operates. Weighted-average loan-to-value ratios on non-prime originations rose roughly five percentage points between 2022 and 2025, even as vehicle values moderated. The company appears to be betting that tighter underwriting, combined with more sophisticated capital recycling, will sustain growth without chasing riskier borrowers.
What it means for AI-driven lending
Pagaya's resecuritization programme arrives at a moment when the fintech lending sector is under twin pressures: investor appetite for yield remains strong, but credit performance in consumer auto is softening. The company's ability to refinance seasoned AI-originated portfolios could set a template for other algorithm-driven lenders that need to demonstrate their models hold up across full market cycles.
Whether the AI edge is real or merely well-marketed remains an open question for the structured-finance community. But with $450 million on the table and a queue of institutional investors willing to buy the same loans for a second time, Pagaya has at least earned itself another hearing.