DailyPay, a company that offers on-demand pay and financial health solutions, has recently completed an asset-backed securitisation (ABS) of its receivables worth USD 200 million.
Asset-backed securitisation is the process of converting illiquid assets into marketable securities that can be sold to investors. These securities are supported by cash flows from the underlying assets, making them valuable financial instruments.
Advancing the Pay Cycle
This securitisation marks a significant step for DailyPay and bolsters its ability to collaborate with employers to eliminate traditional bi-weekly pay cycles. By partnering with DailyPay, employers can enhance their relationship with employees, allowing them access to pay based on their individual schedules.
With USD 25 billion in payment volume, DailyPay aims to refine its capital structure and support growth objectives through innovative financial strategies. The company provides employers the means to offer on-demand access to employee earnings without affecting cash flow management or payroll processes.
Reducing Financial Stress
DailyPay’s latest initiative directly addresses a critical issue faced by many Americans, where over 50% of individuals reported struggling to make ends meet due to increasing inflation. This situation has led to decreased consumer confidence.
The company believes that employees should have access to their earnings as they are earned and advocates for a financial system tailored to individual needs. DailyPay’s new capital position is designed to assist both its clients and their workforce in these challenging economic times.
Adding this USD 200 million securitisation, DailyPay has secured almost USD 1 billion in debt financing backed by on-demand receivables, including a previously existing USD 760 million secured debt facility with Barclays, Citi, and TPG Angelo Gordon.
The offering comprised four classes of notes—A, B, C, and D—and was rated by Morningstar DBRP. The credit ratings agency assigned a range from AA (sf) to BB (sf). Barclays acted as the lead bookrunner and structuring agent, with Citi and Morgan Stanley serving as joint bookrunners. Latham & Watkins LLP provided legal advice to DailyPay, while Mayer Brown LLP advised the bookrunners.