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Klarna’s Debt Costs Rise as Buy-Now-Pay-Later Sector Suffers

  • Swedish fintech hit by sharp sell off in floating rate debt
  • Debt stress comes as Klarna’s valuation takes $16 billion hit
The Klarna app icon.

The Klarna app icon.

Photographer: Hollie Adams/Bloomberg
Updated on

Swedish buy-now-pay-later company Klarna Bank AB saw its borrowing costs climb to their highest level on record as rising rates hit the company’s debt and equity valuation. 

Europe’s most valuable fintech unicorn saw the credit spreads on some of its floating rate debt widen sharply in recent sessions as it looks set to take a $16 billion hit on its valuation in an upcoming funding round. The company said Monday it will lay off staff, with about 10% of the workforce impacted by cost-cutting measures.