- Xpeng has completed RMB 710 million ($100 million) ABS issuance to supplement working capital and support the development of its leasing business.
- The AAA-rated senior tranche carries a coupon rate as low as 2.28 percent.
Xpeng (NYSE: XPEV) announced today that it has completed a RMB 710 million ($100 million) asset-backed securities (ABS) issuance to supplement working capital and support leasing business development.
This project marks China's first off-balance-sheet ABS issuance for new energy vehicle (NEV) financial leasing, achieving asset derecognition without relying on issuer credit enhancement, the company said in an announcement today.
The originator of the issuance is Xpeng's leasing subsidiary and the offering received strong investor demand, with the AAA-rated senior A tranche achieving a coupon rate as low as 2.28 percent.
For reference, China's benchmark one-year Loan Prime Rate (LPR) currently stands at 3.0 percent, while the five-year LPR is 3.5 percent.
A lower coupon rate indicates less issuance cost.
The ABS issuance did not employ external credit enhancement, relying instead on Xpeng's high-quality asset credit, the company stated.
The project received the highest green rating of G1. The underlying asset pool involves projects expected to reduce carbon dioxide emissions by 11,000 metric tons annually and save 5,200 metric tons of standard coal equivalent, it noted.
Funds from this project will be specifically allocated to green assets like NEVs to promote the adoption of such vehicles, Xpeng said.
This marks Xpeng's latest ABS financing initiative. In 2022, the company completed two ABS issuances totaling RMB 1.8 billion.
Domestic peer Nio Inc (NYSE: NIO) also issued ABS in 2021.
($1 = RMB 7.1217)
