Lotte Card Issues $300 Million Overseas ABS

Issued with lower interest rates than domestic corporate bonds using credit card receivables as underlying assets to reduce financing costs

[Asia Economy Reporter Yu Je-hoon] Lotte Card announced on the 29th that it successfully issued overseas asset-backed securities (ABS) worth 300 million USD (approximately 400 billion KRW).

This ABS, issued based on credit card sales receivables as underlying assets, saw participation from Singapore's DBS Bank and France's Societe Generale as investors. The average maturity is three years. The funds raised will be used to refinance existing borrowings and for operating capital, and currency and interest rate swaps were used to eliminate risks arising from exchange rate and interest rate fluctuations.

Since being sold from Lotte Group to MBK Partners in 2019, Lotte Card has steadily increased its profit scale through strengthening product competitiveness, including the LOCA series. In particular, its consolidated operating profit for the third quarter of this year recorded 339.8 billion KRW, a 47.6% increase compared to the same period last year. Despite the recent deterioration in financial market funding conditions, the company explained that it was able to successfully issue overseas ABS by attracting investors based on excellent profitability and financial stability.

A Lotte Card official stated, "Despite the ongoing tightening of the funding market recently, we were highly evaluated for maintaining high profitability, asset soundness, and financial safety, enabling us to successfully issue long-term overseas ABS under more favorable conditions compared to domestic ones," adding, "We will closely monitor liquidity indicators and market conditions, secure stable liquidity through strategic funding, and reduce funding costs."

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