Debt

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Debt

Note 12. Debt

The following table summarizes the components of our debt:

	December 31, 2023									December 31, 2022
Borrowing Description	Total Collateral(1)		Stated Interest Rate(2)	Weighted Average Effective Interest Rate(3)	Termination/Maturity(4)	Total Capacity		Total Outstanding(5)		Total Outstanding
Debt Facilities
Personal loan warehouse facilities	$	1,271,233	5.61% – 7.30%	6.20%	January 2024 – January 2032	$	4,925,000	$	1,077,444	$	1,452,085
Student loan warehouse facilities	2,530,122		6.13% – 7.16%	6.72%	April 2024 – December 2026	3,945,000		2,095,046		1,504,926
Credit card warehouse facility	—		6.68%	—%	June 2025	100,000		—		—
Risk retention warehouse facilities(6)	74,043		5.47% – 8.72%	7.03%	January 2024 – October 2027	200,000		67,038		101,964
Revolving credit facility(7)			6.95%	7.07%	April 2028	645,000		486,000		486,000
Other Debt
Convertible senior notes(8)			—%	0.43%	October 2026			1,111,972		1,200,000
Other financing(9)	186,556					216,525		—		—
Securitizations
Personal loan securitizations	494,643		1.30% – 6.21%	5.94%	September 2030 – May 2031			239,340		529,132
Student loan securitizations	212,140		3.09% – 4.44%	3.83%	May 2040 – August 2048			182,744		246,856
Total, before unamortized debt issuance costs, premiums and discounts								$	5,259,584	$	5,520,963
Less: unamortized debt issuance costs, premiums and discounts								(26,168)		(35,081)
Total debt								$	5,233,416	$	5,485,882

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(1)As of December 31, 2023, represents the total of the unpaid principal balances within each debt category, with the exception of the risk retention warehouse facilities, which include securitization-related investments carried at fair value. In addition, certain securitization interests that eliminate in consolidation are pledged to risk retention warehouse facilities. Collateral balances relative to debt balances may vary period to period due to the timing of the next scheduled payment to the warehouse facility.

(2)For variable-rate debt, the ranges of stated interest rates are based on the interest rates in effect as of December 31, 2023. The interest on our variable-rate debt is typically designed as a reference rate plus a spread. Reference rates as of December 31, 2023 included overnight SOFR, one-month SOFR, three-month SOFR, prime rate and commercial paper rates determined by the facility lenders. As debt arrangements are renewed, the reference rate and/or spread are subject to change. Unused commitment fees ranging from 0 to 65 bps on our various warehouse facilities are recognized within noninterest expense—general and administrative in our consolidated statements of operations and comprehensive loss.

(3)Weighted average effective interest rates are calculated based on the interest rates in effect as of December 31, 2023 and include the amortization of debt issuance costs.

(4)For securitization debt, the maturity of the notes issued by the various trusts occurs upon either the maturity of the loan collateral or full payment of the loan collateral held in the trusts. Our maturity date represents the legal maturity of the last class of maturing notes. Securitization debt matures as loan collateral payments are made.

(5)There were no debt discounts or premiums issued during the year ended December 31, 2023.

(6)For risk retention warehouse facilities, we only state capacity amounts for facilities wherein we can pledge additional asset-backed bonds and residual investments as of the balance sheet date.

(7)As of December 31, 2023, $13.1 million of the revolving credit facility total capacity was not available for general borrowing purposes because it was utilized to secure letters of credit. Refer to our letter of credit disclosures in Note 18. Commitments, Guarantees, Concentrations and Contingencies for more details. Additionally, the interest rate presented is the interest rate on standard withdrawals on our revolving credit facility, while same-day withdrawals incur interest based on the prime rate.

(8)The original issue discount and debt issuance costs related to the convertible senior notes are amortized into interest expense—corporate borrowings in the consolidated statements of operations and comprehensive loss using the effective interest method over the contractual term of the notes. For the years ended December 31, 2023, 2022 and 2021, total interest expense on the convertible notes was $5.1 million, $5.1 million and $1.2 million, respectively, and the effective interest rate was 0.43%, 0.42% and 0.43%, respectively, related to amortization of debt discount and issuance costs. As of December 31, 2023 and December 31, 2022, unamortized debt discount and issuance costs were $13.3 million and $19.4 million, respectively, and the net carrying amount was $1.10 billion and $1.18 billion, respectively.

(9)Includes $54.8 million of loans and $131.7 million of investment securities pledged as collateral to secure $166.5 million of available borrowing capacity with the FHLB, of which $27.2 million was not available as it was utilized to secure letters of credit. Refer to our letter of credit disclosures in Note 18. Commitments, Guarantees, Concentrations and Contingencies for more details. Also includes unsecured available borrowing capacity of $50.0 million with correspondent banks.

The total accrued interest payable on borrowings of $11,189 and $13,538 as of December 31, 2023 and 2022, respectively, was presented within accounts payable, accruals and other liabilities in the consolidated balance sheets.

Convertible Senior Notes

In October 2021, we issued $1.2 billion aggregate principal amount of convertible notes due 2026, pursuant to an indenture, dated October 4, 2021, between the Company and U.S. Bank National Association, as trustee. The convertible notes are unsecured, unsubordinated obligations. The convertible notes do not bear regular interest. The convertible notes will mature on October 15, 2026, unless earlier repurchased, redeemed or converted.

The net proceeds from the offering were $1.176 billion, after deducting the 2% initial purchasers’ discount of $24 million, and before the cost of the Capped Call Transactions, as described below, and offering expenses payable by the Company. The debt issuance costs of $1.7 million included third-party legal and accounting fees. The original issue discount and debt issuance costs are amortized into interest expense—corporate borrowings in the consolidated statements of operations and comprehensive loss using the effective interest method over the contractual term of the convertible notes.

In December 2023, the Company entered into separate, privately negotiated repurchase agreements with a limited number of holders of the convertible notes to repurchase $88.0 million aggregate principal amount of the convertible notes, which were settled through the issuance of 9,490,000 shares of common stock. Following these repurchases, $1.1 billion aggregate principal amount of the convertible notes remain outstanding.

These transactions were determined to be an extinguishment of debt. The difference between the consideration used to repurchase the convertible notes and the carrying value of the convertible notes, less retirement of discount and issuance costs, resulted in a gain on extinguishment of $14.6 million recorded within noninterest income—other in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023.

We used a portion of the net proceeds from the October 2021 offering to fund the cost of entering into the Capped Call Transactions, as described in Note 13. Equity. The remainder of the net proceeds from the offering were used to pay related expenses and were allocated for general corporate purposes. All of these transactions are expected to remain in effect notwithstanding the December 2023 repurchases.

Conversion

The convertible notes are convertible by the noteholders prior to the close of business on the business day immediately preceding April 15, 2026 if certain conditions related to the Company’s share price are met, there are certain corporate events or distributions of the Company’s stock, or the Company calls the notes for redemption, each as set forth in the indenture. On and after April 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date, the convertible notes are freely convertible by the noteholders. The conversion rate is 44.6150 shares of our common stock per $1,000 principal amount of convertible notes, which represents an initial conversion price of approximately $22.41 per share of our common stock. As of December 31, 2023, the convertible notes are potentially convertible into 49,610,631 shares of common stock.

Settlement

We will settle conversions by paying or delivering, at our election, cash, shares of our common stock or a combination of cash and shares of our common stock, based on the applicable conversion rate(s). If we elect to deliver cash or a combination of cash and shares of our common stock, then the consideration due upon conversion will be determined over an observation period consisting of 30 “VWAP Trading Days” (as defined in the indenture). The conversion rate and conversion price will be

subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.

Redemption

The convertible notes will also be redeemable, in whole or in part, at our option at any time, and from time to time, on or after October 15, 2024 through the 30th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the convertible notes to be redeemed, plus accrued interest, if any, thereon to, but excluding, the redemption date, but only if certain liquidity conditions described in the indenture are satisfied and certain conditions are met with respect to the last reported sale price per share of our common stock prior to conversion. In addition, calling any note for redemption will also constitute a Make-Whole Fundamental Change with respect to that note, in which case the conversion rate applicable to the conversion of that note will be increased in certain circumstances if it is converted after it is called for redemption.

See Note 1. Organization, Summary of Significant Accounting Policies and New Accounting Standards for our accounting policy as it relates to the convertible notes.

Material Changes to Debt Arrangements

On April 28, 2023, we entered into an Amended and Restated Revolving Credit Agreement (“Amended and Restated Credit Agreement”), which amended and restated the Revolving Credit Agreement (“Original Credit Agreement”), dated as of September 27, 2018, among Social Finance, Inc., the lenders party thereto, the issuing banks party thereto and Goldman Sachs Bank USA, as administrative agent. The Amended and Restated Credit Agreement amended and restated the Original Credit Agreement to, among other things, (i) increase the initial aggregate commitment to $645 million, (ii) extend the maturity date of the revolving credit facility to the date that is five years after the closing date, (iii) change the borrower entity under the revolving credit facility to SoFi Technologies, Inc., (iv) replace LIBOR as the term benchmark rate applicable to revolving loans denominated in U.S. dollars with a benchmark rate equal to Term SOFR plus a credit spread adjustment of 0.10%, and (v) effect certain other changes. The Amended and Restated Credit Agreement also contains financial covenants that require the Company to maintain a certain amount of unrestricted cash and cash equivalents and to meet certain risk-based capital ratios and a leverage ratio.

During the year ended December 31, 2023, we opened two personal loan warehouse facilities with an aggregate maximum available capacity of $1.0 billion, two student loan warehouse facilities with an aggregate maximum available capacity of $550.0 million and closed one risk retention warehouse facility.

Our warehouse and securitization debt is secured by a continuing lien and security interest in the loans financed by the proceeds. Within each of our debt facilities, we must comply with certain operating and financial covenants. These financial covenants include, but are not limited to, maintaining: (i) a certain minimum tangible net worth, (ii) minimum unrestricted cash and cash equivalents, (iii) a maximum leverage ratio of total debt to tangible net worth, and (iv) minimum risk-based capital and leverage ratios. Our debt covenants can lead to restricted cash classifications in our consolidated balance sheets. Our subsidiaries are restricted in the amount that can be distributed to the parent company only to the extent that such distributions would cause the financial covenants to not be met. We were in compliance with all financial covenants.

We act as a guarantor for our wholly-owned subsidiaries in several arrangements in the case of default. As of December 31, 2023, we have not identified any risks of nonpayment by our wholly-owned subsidiaries.

Maturities of Borrowings

Future maturities of our outstanding debt with scheduled payments, which included our revolving credit facility and convertible notes, were as follows:

	December 31, 2023
2024	$	—
2025	—
2026	1,111,972
2027	—
2028	486,000
Thereafter	—
Total	$	1,597,972