Figure prices $600M notes at 8.5% to fund Kiavi acquisition

Figure Technology Solutions priced $600 million of 8.500% senior notes due 2031 Wednesday, tapping debt markets to fund its acquisition of AI-powered lending platform Kiavi.

The company plans to use the net proceeds for the cash consideration payable in the Kiavi deal, general corporate purposes and offering-related expenses, Figure said in a statement.

The notes, sold at 100% of principal, will yield approximately $587.5 million after deducting initial purchasers' discounts, commissions and estimated offering costs. Closing is expected July 14. The offering is not contingent on the Kiavi acquisition closing, Figure said. Certain domestic wholly-owned subsidiaries will guarantee the notes on a joint and several basis.

The debt raise comes as Figure, a blockchain-native capital marketplace with more than 380 partners, has originated roughly $29 billion in home equity loans to date. The company held about $1.32 billion in total debt as of the first quarter, according to InvestingPro data, and maintains a current ratio of 1.9. The Kiavi acquisition would add an AI-powered real estate lending platform to Figure's suite of tokenized asset products, which include its consumer credit marketplace Figure Connect and on-chain lending protocol Democratized Prime.

The notes were offered only to qualified institutional buyers under Rule 144A and to non-US persons outside the United States under Regulation S, in a private offering exempt from Securities Act registration requirements. Figure has received AAA ratings from S&P and Moody's on multiple loan securitizations, the first such ratings for blockchain finance.

Figure's stock rose 6.98% to $32.79 on Wednesday, reflecting investor confidence in the capital raise and the strategic rationale behind the Kiavi deal. The company's ecosystem also includes DART for asset custody and lien perfection, and $YLDS, an SEC-registered yield-bearing stablecoin issued by a tokenized face-amount certificate company.

The Kiavi acquisition, if completed, would expand Figure's presence in the residential real estate lending market at a time when non-bank lenders are capturing a growing share of home equity origination. Figure's blockchain-based loan origination system and secondary market platform have processed approximately $29 billion in home equity volume, making its ecosystem the largest non-bank provider of HELOCs, according to the company.

This article is for informational purposes only and does not constitute investment advice.