PayPal to Sell European BNPL Loan Receivables to KKR, Increase Stock Buybacks
June 20 2023 - 7:52AM
Dow Jones News
By Will Feuer
PayPal said it has inked a multi-year deal to sell substantially
all of its European buy now, pay later loan portfolio to investment
firm KKR, allowing the payments company to repurchase more of its
shares.
The companies said they have signed a EUR3 billion, or roughly
$3.3 billion, replenishing loan commitment. Through the commitment,
private credit funds and accounts managed by KKR will buy up to
EUR40 billion of BNPL loan receivables originated by PayPal in
France, Germany, Italy, Spain, and the United Kingdom.
PayPal expects the deal to initially generate about $1.8
billion, which the company plans to use to return capital to
shareholders. PayPal said the deal is already contemplated in its
full-year earnings and adjusted earnings outlook.
Under the terms of the deal, KKR will buy substantially all the
European BNPL loan portfolio held on PayPal's balance sheet and
will also buy future originations of eligible BNPL loans. PayPal
will remain responsible for customer-facing activities.
Gabrielle Rabinovitch, acting chief financial officer of PayPal,
said the deal would allow PayPal to accelerate BNPL originations to
keep pace with market demand in Europe while preserving cash for
other initiatives.
The deal is expected to close in the second half of 2023. Once
the deal closes, PayPal expects to allocate about $1 billion toward
incremental share buybacks in 2023. For the full year, the company
now expects to repurchase about $5 billion in stock.
Shares of PayPal rose 1.3% to $67.30 in premarket trading.
Write to Will Feuer at Will.Feuer@wsj.com
(END) Dow Jones Newswires
June 20, 2023 07:37 ET (11:37 GMT)
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