Pérez-Llorca advises on KKR’s acquisition of up to 40b in ‘buy now, pay later’ PayPal loans in Europe

Pérez-Llorca has advised PayPal on KKR’s acquisition of up to 40b in ‘buy now, pay later’ PayPal loans in Europe.

The firm lawyers who has participated on the operation are Carlos Pérez Dávila, partner of Finance Department, Josefina García, partner of Financial Services Department, Gabriel Salarich, counsel of Finance, Santiago Bertola, lawyer of the Finance Department, Enrique Hernández, lawyer of Finance Department, Andrea Sánchez, Industrial Property, Intellectual Property and Technology lawyer and Alicia Maddio, Industrial Property, Intellectual Property and Technology lawyer.

PayPal Holdings and KKR, a leading global investment rm, today announced the signing of an multi-year agreement for a 3 billion euros replenishing loan commitment under which private credit funds and accounts managed by KKR will purchase up to 40 billion euros of buy now, pay later (BNPL) loan receivables originated by PayPal in France, Germany, Italy, Spain, and the United Kingdom.

Under the terms of the agreement, KKR’s private credit funds and accounts will acquire substantially all the European BNPL loan portfolio held on PayPal’s balance sheet at the close of the transaction and will also acquire future originations of eligible BNPL loans. PayPal will remain responsible for all customer-facing activities, including underwriting and servicing, associated with its European BNPL products.

While the concept of split installment payments for consumer purchases has been around for decades and online consumer nancing has been a strategic oering of PayPal since 2008, BNPL has dramatically increased in popularity over the past several years. Since launching its rst BNPL oering in 2020, PayPal has become an industry leader with its PayPal Pay Later products, issuing more than 200 million loans to over 30 million customers in eight markets around the world. In 2022, PayPal processed more than $20 billion of BNPL payment volume globally, up approximately 160% from 2021.