Lotte Card Co., Ltd. issues 167 billion won in ABCP; three banks guarantee purchases

[Financial News] Lotte Card Co., Ltd. issued 167 billion won in asset-backed commercial paper (ABCP).
ABCP is a short-term financial product issued against underlying assets such as real estate project financing (PF) loan receivables or accounts receivable. Financial companies issue it through a special purpose company (SPC), with principal and interest repaid using cash flows generated by the underlying assets.
According to the card industry on the 20th, Lotte Card Co., Ltd. issued 167 billion won in domestic ABCP backed by auto installment financing receivables. This is the first time Lotte Card Co., Ltd. has raised securitization funding using auto installment financing receivables as the underlying assets.
As a result, Lotte Card Co., Ltd. has secured an additional securitization funding tool alongside funding channels based on its corporate creditworthiness, such as card bonds and commercial paper (CP).
The privately placed ABCP has a total maturity of 42 months and was structured as a rollover, with the amount refinanced decreasing each month until final repayment.
Lotte Card Co., Ltd. signed ABCP purchase guarantee and credit support agreements with three banks, including Nonghyup Bank, Industrial Bank of Korea (IBK) and Woori Bank. In recognition of the stability provided by these arrangements, it received an A1(sf) rating from Korea Investors Service and NICE Investors Service.
Lotte Card Co., Ltd. offers auto installment financing, focusing on products such as Lotte Card Direct Auto, which combines credit card payments with installment financing. As of the first half of this year, its auto installment financing assets totaled 1.3564 trillion won, up 16.1% from 1.1678 trillion won in the same period a year earlier.
A Lotte Card Co., Ltd. representative said, “Thanks to the growth of our auto installment financing assets, we successfully raised securitization funding for the first time using those receivables as the basis,” adding, “We will continue our efforts to diversify our funding sources.”

[email protected] Kim Tae-il Reporter