KBRA Comments on Lawsuit Filed by Pagaya Against Klarna
On May 13, 2026, Pagaya Technologies Ltd. (“Pagaya”), together with certain affiliates, filed a lawsuit against Klarna, Inc. (“Klarna”) and Klarna Group plc in the U.S. District Court for the District of Delaware. The lawsuit relates to alleged misappropriation of intellectual property and trade secrets under the Defend Trade Secrets Act of 2016. KBRA maintains ratings on two revolving ABS transactions backed by “buy now, pay later”, point-of-sale consumer loans that were originated or will be originated using Pagaya’s proprietary credit decisioning model through the Klarna platform.
The two revolving ABS transactions are Pagaya Point of Sale Holdings Grantor Trust 2025-1 and Pagaya Point of Sale Holdings Trust 2025-1 (“POSH 2025-1”), and Pagaya Point of Sale Holdings Grantor Trust 2025-2 and Pagaya Point of Sale Holdings Trust 2025-2 (“POSH 2025-2”). In both transactions, Klarna serves as servicer and platform/program administrator for the loans originated through its platform, while Nelnet Servicing, LLC is the backup servicer. The revolving periods of POSH 2025-1 and POSH 2025-2 will end on November 30, 2026 and April 30, 2027, respectively.
