Klarna completes $1.7 billion risk transfer transaction with Värde Partners

Klarna (NYSE: KLAR) entered into a $1.7 billion Significant Risk Transfer transaction with a consortium led by Värde Partners, the Swedish digital payments company announced. The three-year agreement covers Euro-denominated loans and aims to free up capital for continued growth.

The transaction represents Klarna's sixth SRT deal and what the company describes as its largest and most efficient to date. Chief Financial Officer Niclas Neglén stated that the arrangement allows Klarna to "maximize every unit of capital to support our continued momentum."

SRT transactions enable banks to transfer credit risk to third parties while retaining the loans on their balance sheets, improving capital efficiency. The deal follows Klarna's recent announcement of a $2 billion facility supporting $17 billion of US financing expansion.

Klarna operates as a global digital bank and payments provider with over 118 million active users worldwide and processes 3.4 million transactions daily. The company partners with more than one million retailers including major brands such as H&M, Sephora, and Nike.

The company's banking license serves as a competitive advantage in the payments industry, according to management statements. The latest transaction supports Klarna's capital deployment strategy on a global basis as it continues expanding its lending operations.

Information about the transaction was provided in a company press release.

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