Aug. 29 at 12:35 PM
$PGY A new FUNDAMENTAL CATALYST for Pagaya: (3)
Basel III Endgame
3. Mitigating 5% Risk Retention Friction
While statutory 5% "skin-in-the-game" laws remain unchanged, the
regulatory softening transforms the broader secondary asset
landscape.
• The Shift: Capital is no longer artificially locked up to meet punitive
bank buffers, flowing instead into high-yielding private credit and
structured asset-based finance.
• The Effect on PGY: Because downstream capital markets are open and
active, Pagaya can structuralize its ABS products flexibly. They can shift
their 5% mandate into safer, yield-bearing mezzanine notes rather
than holding illiquid residual capital. This maximizes operational cash
flow and limits mark-to-market impairment risks.
