Auto marketplace operator KCar Inc. successfully arranged a capital injection of $46 million U.S. by issuing asset-backed securities (ABS) exactly one year after using the same debt tool for capital. The latest capital injection will be used to finance more used-car buyers in South Korea, according to the company.
KCar, a full-service automotive marketplace with in-house financing services, raised this ₩60 billion from its own credit line. This issuance is different from the previous ₩55 billion worth of ABS issued in June last year, when Woori Bank also contributed ₩30 billion. However, the latest ABS is also backed by used-car installment bonds, the first-of-its-kind initiative in the industry, said KCar.
With a maturity of up to 39 months, the asset-backed securities, issued in an environment of rising interest rates, bet on “the solid reliability of KCar as the No. 1 used-car distribution channel,” it said.
In digital auto retail, KCar.com leads the pack among competitors, such as BobaeDream.co.kr and CarSales-backed EnCar.com. Measured by traffic, it is one of the country’s top 3 sites, according to SimilarWeb.
KCar’s financing arm, launched in May 2019, reported high asset quality with a low delinquency rate in Q1 of FY2022. In 2021, it posted enormous growth in operating profit of 249% to ₩8.3 billion ($6.4 million U.S.). In that year, the group’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $14.9 million U.S.
“We will do our best to provide customers with continuous and stable financing services based on the high reliability of the KCar used-car site,” said Ham Bok-Joo, CEO of KCar Capital.