Ann: MONEYME executes $178m ABS transaction, page-6

I'm having trouble understanding it.

BBSW is 4.4% or so.
Add 1.35%
= 5.75%.

So people are lending us $178m of cash, and we pay them 5.75% PA, and it is guaranteed by personal loans ($178m, or some other amount)? So if we failed to pay, they could take on the loans?

Is that cheaper than our usual funding? KCN (restarting gold miner) is paying 13%+ recently, but that's quite a different case.

'Demand in excess' sounds good. Like we can repeat the process if it's beneficial.


The alternative is, we take on a new loan (if covenant ratios allow), potentially more expensive than 5.75%? Then we can lend more.

Or in this case, we get a $178m loan at 5.75% from ABS, and can then lend more.


But I thought ABS meant taking $178m of debtors off the books, and giving it to the investors. Like we gain $178m cash (or some other amount) and lose $178m of debtors (or some other amount). But then I'm confused again, by "The transaction was priced competitively, with the Aaa-tranche priced at 1.35% over 1-month Bank Bill Swap rate (BBSW)."

Is it like, this $178m of debtors is now funded at 5.75% PA using ABS? They mentioned "frees up capital for new loan originations" so it sounds like some cash upfront? Or this ABS set-up requires less equity contribution from us that the usual funding arrangement? So the equity contribution that was allocated to this $178m debtors can now be allocated to other/new loans?