Zip shareholders - Diamond Hands, page-330

NAB warms up investors for Zip Co warehouse deal
Anthony Macdonald and Yolanda Redrup
Aug 29, 2021 – 9.32pm
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Zip Co’s preparing a trip to credit markets this week, seeking to raise an estimated $500 million for its Australian funding facility.

It is understood National Australia Bank’s bankers have been preparing institutional investors for the raising in recent days, telling them the deal should launch as early as Tuesday.


Only days after Zip Co founders Peter Gray (left) and Larry Diamond presented the group’s full year results, it’s preparing to top up its Australian funding. Louie Douvis

The deal, dubbed Zip Master Trust Series 2021-2 ABS, is expected to target about $500 million and see the top tranche priced at 85 to 90 basis points above the one-month bank bill swap rate, according to the early soundings.

It would be Zip’s second Australian securitisation deal this year. In March, it priced a $500 million transaction, with the top-rated Class A1 Notes fetching 100 basis points above the swap rate. Moody’s upgraded those notes to Aaa in July.

The deal comes hot on the heels of Zip’s FY21 results, which saw the payments group announce $5.8 billion total transaction volume and $403 million revenue in the 12 months to June 30.


Its Australian business accounted for more than half of the group’s transactions and revenue, and recorded $8.4 million cash EBITDA. The group lost $22.9 million at the EBITDA level.

Zip’s securitisation deal comes as traders also get ready for a similar transaction from Bendigo and Adelaide Bank, which is taking indications of interest for the sale of RMBS in its Torrens Series.

A similar deal from ASX-listed Resimac last week saw the group raise $1 billion. The top tranche, worth $900 million, was priced at one month swaps plus 68 basis points, according to information sent to investors on Friday.