Klarna has announced the agreement to sell its US BNPL loans to Nelnet in order to support the continued expansion of the product in the United States.
Following this announcement, the strategy will enable Klarna to sell newly originated, short-term, secure, and interest-free Pay in 4 receivables to Nelnet on a rolling basis. Nelnet will purchase up to USD 26 billion of Klarna’s US Pay in 4 loans on an ongoing basis over the life of the program in a multi-year, forward flow agreement.
In addition, with this initiative, up to USD 26 billion in total payment volumes are expected to be sold. The transaction is set to deliver scalable and efficient funding to power Klarna’s growth across the region of the US, while improving balance sheet flexibility and supporting long-term capital strategy as well.
More information on Nelnet’s USD 26 billion purchase of Klarna’s US BNPL loans
According to the official press release, the forward flow structure is expected to provide access to a predictable, off-balance-sheet funding, while also underscoring Klarna’s ability to structure and execute large-scale capital markets transactions. At the same time, Klarna will continue to originate and service all receivables under the program, while also ensuring continuity and quality of experience for both consumers and merchant partners.
The partnership leverages Nelnet’s expertise and financial solutions in order to invest in secure cash-flowing assets while also supporting Klarna’s valuable offering to consumers across the region of the US, with the support of its lending partners. In addition, the strategy will give Klarna the possibility to scale a core product responsibility, while also continuing to provide improved, interest-free payment experiences to its clients.
Both companies will focus on meeting the needs, preferences, and demands of customers and users in an ever-evolving market, while prioritising the process of remaining compliant with the regulatory requirements and laws of the industry as well.
