Klarna, the Stockholm-based BNPL lender, is working on a new significant risk transfer (SRT) deal to offload credit risk on about 5 billion kroner ($516M) of loans from its Swedish unit, freeing capital to accelerate its international expansion, according to Bloomberg. Preliminary terms would provide credit protection on a junior portion equal to roughly 10% of the reference pool, with Klarna keeping a first-loss piece and the transaction possibly closing this quarter. Klarna wants the freed capital to fund a US push, having applied for a US bank license to expand beyond its current partner-bank setup, as its stock trades near half its September IPO price. April saw Klarna’s sixth and largest SRT to date, a $1.7B deal led by Varde Partners, part of a record pace of such risk transfers across banks.
