Citigroup Leads US$260M Asset-Backed Financing for WeLab
October 30, 2023
Citigroup Inc., a global financial services corporation, has taken the lead in a substantial US$260 million asset-backed financing arrangement for WeLab Ltd., which is recognised as Hong Kong’s largest online lending platform. The financing deal, organized by Citigroup as the sole senior underwriter, aims to leverage high-quality assets as collateral, allowing companies to borrow at lower rates compared to issuing unsecured debt.
With traditional load growth hindered by successive rate hikes and borrowers facing difficulties in debt repayment, banks are increasingly expanding their securitization businesses. This move enables them to diversify funding sources and hedge credit risk exposures. By pooling various forms of debt, such as mortgages, auto loans, and credit-card obligations, banks can repackage these assets and sell them to investors.
WeLab, backed by prestigious investors like Seqouia Capital and tycoon Li Ka-shing, has experienced remarkable load balance growth this year, surpassing pre-pandemic levels. This growth can be attributed to strategic partnerships with renowned global companies such as Tesla Inc. and Apple Inc. WeLab’s year-on-year load growth has reached an impressive 37%, and its delinquency rates are notably lower than the industry average. Notably, it holds an almost 90% market share for Tesla’s car loans in Hong Kong and serves as the exclusive financial service provider for Apple’s subscription program in Asia.
This financing deal arrives amidst a deepening credit crisis in China’s market, with its effects spreading to Europe’s junk credit markets. WeLab’s successful expansion and strong market position in the fintech industry highlight its resilience and ability to navigate challenging economic conditions.
Since its establishment in 2013, WeLab has disbursed over US$13 billion in loans, transforming into a pan-Asian fintech platform with a user base of over 60 million individuals and more than 900 enterprise customers across Hong Kong, China, Indonesia and Malaysia.
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