By Matt Wirz

Buy now, pay later platform Affirm has entered into a $4 billion financing partnership with Sixth Street Partners, in a deal that reflect the growing debankification of Wall Street as private-credit firms expand their lending throughout the economy.

Sixth Street, a private-fund manager, will purchase up to $4 billion of Affirm loans through its asset-based finance platform. Off-balance-sheet funding from the transaction will allow Affirm to make more than $20 billion of loans over the next three years.

Expanding beyond corporate debt into auto loans, credit-card debt, inventory and equipment finance gives firms like Sixth Street, Apollo Global Management and Blackstone much bigger markets in which to invest. That helps them raise new funds from clients looking for alternatives to plain-vanilla debt.

The deal is the biggest such funding arrangement for Affirm, which has been cultivating relationships with private fund managers for years to diversify its funding sources. The arrangements give the lender an alternative to the public asset-backed bond market, which can seize up in times of turmoil.

Affirm announced a similar $500 million private credit transaction with insurer Prudential Financial earlier this month.

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(END) Dow Jones Newswires

December 13, 2024 10:21 ET (15:21 GMT)

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