Zip prices maiden US$300m ABS facility at AAA-rated terms
Zip Co Limited (ASX: ZIP) has priced a new two-year US$300.0m securitisation transaction through its US business, marking the first Asset Backed Security (ABS) issuance for Zip US.
The facility is expected to close and settle on or around 1 September 2026. The transaction delivers a material improvement in funding costs and adds diversity to Zip’s funding program.
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Inside the funding deal — pricing, rating and structure
The transaction was priced with a weighted average margin of 143bps over the U.S. 2-year Treasury rate. It was rated by Fitch, with senior notes assigned a AAA rating.
The AAA rating on the senior notes reflects the quality of Zip’s US receivables portfolio, with US credit losses tracking below target at under 1.75% of transaction volume through the fourth quarter, a performance metric that directly supports the pricing terms secured in this transaction.
At the pricing date of 24 August 2026 (EST), the spread between 1-month SOFR and the U.S. 2-year Treasury rate stood at 69.5bps, equating to an effective rate on the deal of 1-month SOFR + 2.025%.
| Feature | Detail |
|---|---|
| Facility size | US$300.0m |
| Tenor | Two years |
| Weighted average margin | 143bps over U.S. 2-year Treasury |
| Credit rating (senior notes) | AAA (Fitch) |
| Effective rate | 1-month SOFR + 2.025% |
| Expected settlement | On or around 1 September 2026 |
Zip has attributed three strategic benefits to the transaction:
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A material improvement in funding costs.
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A broadened institutional investor base.
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Added diversity across the funding program.
Group CFO Commentary
“We are pleased to establish this new US$300 million ABS facility, further strengthening our funding platform, broadening our institutional investor base and supporting our continued growth in the US. The attractive pricing and terms reflect the strength of our business, the quality of our receivables and our disciplined approach to credit risk management. The additional capacity also positions the US business well as it heads into a seasonally busy second-quarter period,” said Gordon Bell, Group Chief Financial Officer.
Why this matters for the Zip investment case
The facility strengthens Zip’s funding platform and supports continued growth in the United States, one of the company’s two core operating markets alongside Australia and New Zealand. On 17 July 2026, Zip announced a wind down of its New Zealand operations.
Zip also cleared its Australian legal overhang in May 2026, settling the Firstmac trade mark dispute and acquiring outright ownership of the ZIP brand name, removing a distraction that had run alongside the group’s US growth acceleration.
The additional capacity positions the US business ahead of what the CFO described as a “seasonally busy second-quarter period.” The transaction adds funding diversity while lowering the cost of capital drawn against the company’s US receivables.
Key dates for the transaction are as follows:
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Priced: 24 August 2026.
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Expected to close and settle: on or around 1 September 2026.
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