DailyPay, a provider of On-Demand Pay as well as financial wellness solutions, completed a $200 million asset-backed securitization (ABS) of its On-Demand Pay receivables. This transaction, backed by various financial institutions, establishes a new asset class and extends DailyPay’s capacity to partner with employers in discontinuing the traditional two-week pay cycle.
“In a recent study, more than half of Americans reported living paycheck-to-paycheck. And with rising inflation, consumer confidence is waning,” Stacy Greiner, CEO of DailyPay, said. “Hard-working people now more than ever deserve access to their pay as they earn it. They deserve a financial system that works for them and addresses their on-demand pace of life. Our new capital position enables us to help even more employers and their employees, fueling our rapid growth.”
“This securitization marks a first for our industry, with strong investor demand validating our differentiated approach to delivering On-Demand Pay,” Deepa Subramanian, chief financial officer of DailyPay, said. “With $25 billion in payments volume, we are continuously looking for new ways to optimize our capital structure to support our growth ambitions.”
The offering included four classes of notes: Class A, Class B, Class C and Class D. Morningstar DBRS rated all classes of notes, assigning ratings ranging from AA (sf) to BB (sf), respectively. Barclays acted as lead bookrunner and structuring agent, with Citi and Morgan Stanley serving as joint bookrunners. Latham & Watkins advised DailyPay, and Mayer Brown advised the bookrunners.
With the addition of the new $200 million securitization, DailyPay has secured nearly $1 billion in debt financing backed by its On-Demand Pay receivables, which includes its existing $760 million secured debt facility with Barclays, Citi and TPG Angelo Gordon.
