Hepsiburada's Asset-Backed Security Issuance Oversubscribed Amid Strong Investor Demand

Rhea-AI Summary

D-MARKET Electronic Services & Trading, operating as Hepsiburada (NASDAQ: HEPS), successfully issued its first asset-backed security (ABS) worth 150 million TRY on June 5, 2024. This issuance is part of a 2 billion TRY limit approved by the Capital Markets Board to PASHA Yatırım Bank Hepsiburada Asset Finance Fund. PASHA Bank facilitated the issuance through Türkiye's first digital ABS platform.

The ABS includes four tranches with maximum maturities of 147 days and interest rates ranging between 54% and 57%. Funds from this issuance will support the growth of Hepsiburada's Buy Now Pay Later (BNPL) business and reduce its working capital impact. The offering was oversubscribed, ending the marketing period early, and attracting major asset management companies, pension funds, and high-net-worth individuals.

Positive

• Successful issuance of asset-backed security worth 150 million TRY.
• Part of a larger 2 billion TRY limit approved by the Capital Markets Board.
• High investor demand leading to early termination of the marketing period.
• Interest rates between 54% and 57% are attractive for investors.
• Funds will sustainably grow Hepsiburada's BNPL business.
• Diverse investor base including major asset management companies, pension funds, and high-net-worth individuals.

Negative

• High-interest rates (54% to 57%) could increase financial costs.
• Short maturity periods (maximum 147 days) may pose a liquidity risk.
• Potential dependency on BNPL receivables for future funding.

Insights

Financial Analyst

Hepsiburada's recent issuance of asset-backed securities (ABS) totaling 150 million TRY marks a noteworthy development for the company and investors. Asset-backed securities are financial instruments backed by a pool of assets, often loans or receivables. In this case, Hepsiburada used its Buy Now Pay Later (BNPL) receivables, a growing segment in e-commerce. The oversubscription of this issuance highlights strong investor confidence and demand, which is a positive signal for the company's financial health.

Investment-grade interest rates between 54 to 57 are substantial, reflecting the risk profile associated with the Turkish market and the underlying BNPL receivables. For Hepsiburada, the funds raised will support sustainable growth in its BNPL business and reduce the impact on working capital. This is particularly beneficial as it could enhance liquidity and operational flexibility. However, it's essential to consider the high-interest rates, which might indicate higher underlying risks. Retail investors should be aware that while this move might bolster Hepsiburada’s financial stability in the short term, the high-interest obligations might affect profitability in the long run.

Market Research Analyst

The launch on PASHA Bank's new digital ABS platform is also significant. This innovative approach to merging ABS expertise with digital tools aligns well with global fintech trends and might offer operational efficiencies and transparency. For Hepsiburada, being one of the first issuers on this platform may enhance its reputation and reliability in the financial markets.

From a market perspective, the early termination of the marketing period due to oversubscription underscores the growing appetite for digital financial products. It signals confidence in Hepsiburada's business model and growth prospects among institutional investors like major asset management companies and pension funds. However, retail investors should consider the potential volatility in the Turkish market and how external factors could influence future issuances and financial stability.

Overall, this issuance not only supports Hepsiburada’s expansion goals but also reflects broader market trends towards digitalization in financial instruments, which could be an indicator of the company's forward-thinking strategies and ability to adapt to market innovations.

ISTANBUL, June 12, 2024 /PRNewswire/ -- D-MARKET Electronic Services & Trading (d/b/a "Hepsiburada") (NASDAQ: HEPS), a leading Turkish e-commerce platform, announced the successful issuance of its first asset-backed security (ABS) amounting to 150 million TRY. This issuance is part of the 2 billion TRY limit approved by the Capital Markets Board to PASHA Yatırım Bank Hepsiburada Asset Finance Fund. PASHA Bank, a pioneer in ABS issuances, recently launched Türkiye's first digital platform to merge its ABS expertise with the digital world. One of the first issuances on this digital platform was for Hepsiburada.

The issuance, which took place on June 5, 2024, includes four tranches with a maximum maturity of 147 days. The interest rate varies between 54% to 57% depending on the maturity. Hepsiburada participated as the originating entity, leveraging its Buy Now Pay Later (BNPL) receivables for this structure.

The funds raised through this issuance will be utilized to sustainably grow Hepsiburada's BNPL business and reduce its impact on working capital. The offering was significantly oversubscribed, and the marketing period was terminated early due to this strong demand, reflecting significant investor appetite. Investors in the issuance included major asset management companies, pension funds, and high-net-worth individuals.

About Hepsiburada

Hepsiburada is a leading e-commerce technology platform in Türkiye, connecting over 63 million members with approximately 230 million stock keeping units across over 30 product categories. Hepsiburada provides goods and services through its hybrid model combining first-party direct sales (1P model) and a third-party marketplace (3P model) with over 101 thousand merchants.

With its vision of leading the digitalization of commerce, Hepsiburada acts as a reliable, innovative and purpose-led companion in consumers' daily lives. Hepsiburada's e-commerce platform provides a broad ecosystem of capabilities for merchants and consumers including: last-mile delivery and fulfilment services, advertising services, on-demand grocery delivery services, and payment solutions offered through Hepsipay, Hepsiburada's payment companion and BNPL solutions provider. HepsiGlobal offers a selection from international merchants through its inbound arm while outbound operations aim to enable merchants in Türkiye to make cross-border sales.

Since its founding in 2000, Hepsiburada has been purpose-led, leveraging its digital capabilities to develop the role of women in the Turkish economy. Hepsiburada started the 'Technology Empowerment for Women Entrepreneurs' programme in 2017, which has supported over 50.5 thousand female entrepreneurs throughout Türkiye to reach millions of customers with their products.

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SOURCE Hepsiburada

FAQ

What is the value of Hepsiburada's asset-backed security issuance?

Hepsiburada's asset-backed security issuance is valued at 150 million TRY.

When was Hepsiburada's asset-backed security issued?

Hepsiburada's asset-backed security was issued on June 5, 2024.

What is the interest rate range for Hepsiburada's asset-backed security (HEPS)?

The interest rate for Hepsiburada's asset-backed security ranges between 54% and 57%.

What will Hepsiburada use the funds from the ABS issuance for?

Hepsiburada will use the funds to grow its Buy Now Pay Later (BNPL) business and reduce its working capital impact.

Why did the marketing period for Hepsiburada's ABS issuance end early?

The marketing period ended early due to strong investor demand and oversubscription.