SoFi Stock Rises After $525M Personal Loan Securitization Agreement With PGIM Fixed Income: Retail Stays Optimistic

Shares of SoFi Technologies Inc (SOFI) rose over 4% on Thursday after the firm announced a $525 million personal loan securitization agreement closed in the fourth quarter of 2024 with funds and accounts managed by PGIM Fixed Income.

Last year, SoFi had placed a $350 million personal loan securitization exclusively with funds and accounts managed by PGIM Fixed Income.

The latest transaction builds on the $3.9 billion in personal loan collateral SoFi sold or securitized to date through the end of the third quarter of 2024.

In the fourth quarter, SoFi announced a $2 billion agreement with Fortress Investment Group to expand its loan platform business. Under this business, the firm refers pre-qualified borrowers to loan origination partners and originates loans on behalf of third parties.

SoFi CEO Anthony Noto said the investor demand for SoFi’s personal loans underscores the quality and strength of its lending business, which continues to contribute meaningfully to the firm’s growth.

Following the announcement, retail sentiment surrounding the stock trended in the ‘bullish’ territory (63/100), down from the ‘extremely bullish’ territory a day ago. Message volumes remained high on Thursday.

SOFI’s Sentiment Meter and Message Volume as of 1:03 p.m. ET on Jan. 16, 2024 | Source: Stocktwits

Retail chatter, however, reflected mixed sentiments surrounding the stock.

Meanwhile, Keefe Bruyette analyst Timothy Switzer sees the firm's $525 million personal loan securitization positively and said it indicates continued demand for the company's paper and capital market conditions are trending well.

According to TheFly, the analyst noted that the amount is relatively small compared to the bank's $25.2 billion fair value loan portfolio, and the recent surge in interest rates may limit continued improvement in the capital markets over the near term, the analyst wrote in a note.

Keefe has kept an ‘Underperform’ rating on the shares with an $8 price target. SoFi shares have gained nearly 110% over the past year.

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