FIIG - The Fixed Income Experts
Zip Pay & Zip Money - FIIG DCM

Warehouse Funding: unrated debt markets support securitisation and growth

Issue Date

December 2023

December 2023

Amount

$34.05 million

$9.65 million

Maturity

10 March 2023

10 March 2023

Term

15 months

15 months

Coupon

1M BBSW + 8.60%

Not disclosed

Issuer Profile

Listed on the ASX (ASX: ZIP) since 2015, Zip Co Limited (“Zip”) is a leading player in the digital retail finance and payments industry. Operating across two core markets - Australia and New Zealand (ANZ) and the Americas, Zip offers consumers both online and in-store point-of-sale retail finance and digital payment services to consumers of enterprise and SME merchants.

Zip is competing primarily with traditional bank consumer finance, targeting the retail, health, education and travel sectors. The ANZ market offers several credit products; full interest free terms (Zip Pay) more commonly known as a ‘buy now, pay later’ (“BNPL”), or interest free for an initial period (Zip Money) and if the customer’s month end balance is below $1,500 (Zip Plus).

The Zip Master Trust (“ZMT”) is a bankruptcy remote securitisation vehicle created to fund Australian receivables originated by Zip. The Zip Master Trust – Series VFN No. 2 (“VFN2”) is a warehouse that sits within the ZMT. The ZMT is Zip’s primary source of funding receivables with limits of ~$2.25bn (as at September 2023) across four rated term deals and two revolving Variable Funding Notes.

Issuer Need

In 2022, FIIG Securities arranged the issue of $36.2m Class B and Class C Notes in the VFN2 to help diversify funding within VFN2. The Notes had a Scheduled Maturity Date in January and Zip was keen to refinance early and upsize across both tranches to optimise the capital structure and reduce its overall cost of funding.

FIIG Solution

FIIG was able to work collaboratively with Zip to create a new capital structure within VFN2 that maximised senior bank funding. The additional capital from the mezz and junior Notes raised allows Zip to continue to invest in the growth of the Australian business.

Talk to us
Daniel Jones Director, Debt Capital Markets



Daniel Jones
Head of Debt Capital Markets

+61 436 944 566
Daniel.Jones@fiig.com.au

FIIG Debt Capital Markets

FIIG has a proven track record of opening the Australian bond markets, having raised over $3.0bn of predominantly unrated bond funding across 80 issues.

The Debt Capital Markets team arranges long term, flexible AUD bond financing for rated and unrated Australian and New Zealand corporates. The DCM team also provides debt advisory services focused on optimising capital structures and diversifying funding options.

If you would like to learn more about how FIIG can assist in the growth of your business...

  Contact Daniel Jones on
0436 944 566