Robinhood Reportedly Eyes First Credit Card-Backed Bond Sale Worth Up To $500M: Retail Cheers 'Positive' Signal

• The bond sale would be backed by bills issued by the company's branded consumer credit cards, according to the report. 
• The offering is expected to be structured in four tranches.
• The fundraising report comes as Robinhood continues to expand its credit card business.

Robinhood Markets Inc. (HOOD) is reportedly exploring its first-ever bond sale backed by credit card receivables, a move that underscores the company's growing ambitions in consumer lending beyond its core retail brokerage business.

According to a Bloomberg report citing a person familiar with the matter, the brokerage firm is seeking investor interest for an asset-backed securities (ABS) offering for at least $400 million and potentially as high as $500 million. 

The bond sale would be backed by bills issued by the company's branded consumer credit cards, according to the report. 

Deal Contours

The offering is expected to be structured in four tranches, with initial pricing discussions for the highest-rated portion indicating a premium of about 0.8 percentage point above benchmark rates. 

Wells Fargo & Co. and Barclays Plc are reportedly managing the deal, as per Bloomberg. 

The fundraising report comes as Robinhood continues to expand its credit card business. In March, the company unveiled a premium $695 credit card plated with real platinum, positioning it as a competitor to offerings from established card issuers such as American Express Co. The launch followed Robinhood's introduction of its no-fee Gold Card two years earlier.

HOOD Stock: Retail Stance

On Stocktwits, retail sentiment around HOOD stock was ‘neutral’ amid ‘normal’ message volumes. 

One user explained that fundraising was a normal move for growing banks and fintech companies as a fund expansion. “Positive sign that their credit card business is getting bigger,” they said. 

https://stocktwits.com/krrao/message/658950221

Another user said Robinhood’s fundraising would be another step in building out its financial ecosystem. “The reported plan for a first bond offering backed by Robinhood credit card receivables shows the company is looking beyond trading revenue and expanding its funding toolkit. Raising capital this way could help support the next phase of credit growth, but investors will be watching how quickly the business scales and how risk is managed,” they said. 

https://stocktwits.com/KernelKeltner/message/658944653

A third user said the plans were “bullish.”

https://stocktwits.com/24_7Markets/message/658945537

HOOD stock has gained nearly 10% over the past year. 

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