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. Zip offers both online and in-store point-of-sale retail finance and digital payment services to consumers of enterprise and SME merchants. Zip provides consumers with two types of revolving line of credit products with either full (Zip Pay) or initial (Zip Money) interest free terms, more commonly known as a ‘buy now, pay later’ solution for consumers.
The Zip Master Trust (“ZMT”) is a bankruptcy remote securitisation vehicle created in 2019 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 current limits of ~$2.1bn across three rated term deals and two revolving Variable Funding Notes.
Issuer Need
Zip was seeking to diversify its sources of capital and introduce new mezzanine and junior notes into the VFN2 warehouse to optimise its capital efficiency and ensure access to capital to fund future growth.
FIIG Solution
Being already familiar with Zip having arranged the Class B Notes in the 2017-1 Trust, 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.
Issuer Testimonial
Zip Co-founder and Global COO, Peter Gray said, “Zip is pleased to have completed our latest warehouse transaction which again validates the quality of our underwriting and receivables, and demonstrates the continued support of both senior and mezzanine investors.”