Ant Financial to raise USD 1.2 bln through asset-backed securities

minutes 2018/10/26 03:23:59
China's Financial News, China News, Ant Financial

Oct 26, 2018 (China Knowledge) - China’s biggest online financial service provider, Ant Financial is seeking to raise USD 1.2 billion through the sales of securities backed by consumer loans; as it files for the application with the Shanghai Stock Exchange on Wednesday.

Ant Financial, is the financial arm of Alibaba Group Holding Ltd <BABA:NYSE>. It leverages on technology to provide inclusive financial services to the customers in China and abroad.

In 2017, Ant Financial’s pre-tax earnings were estimated to be USD 2.1 billion, calculated from disclosures in filings by Alibaba. This represent a 354% increase in pre-tax earnings compared to the same period the previous year.

The company has since sold three-asset backed securities (ABS), totaling to RMB 23 billion. The securities are issued by Ant Financial’s consumer lending unit, Ant Check Later (蚂蚁花呗) and Ant Jiebei (蚂蚁借呗). The consumer lending unit has contributed heavily to the revenue stream of Ant Financial, and money raised from the sales of ABS will help expand such services further.

Ant Check Later is a financial service provided by Ant Financial where consumers can get consumer credit, allowing them to pay for the IR purchases through monthly installment. Ant Jiebei on the other hand allow users to apply for loans directly on the application itself, with repayment period set up the maximum of 12 months.

Ant Financial has previously scaled back on its sales of ABS earlier this year as a crackdown by the Chinese regulators has forced companies to adjust online lending services provided, amid high risks of default in China.

The average value of Ant Financial’s ABS application this year has been RMB 8 billion, as compared to the figure of RMB 29.3 billion last year. 

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