Chinese ride hailing company DiDi announced on March 19th that the company will raise $1.5 billion in funding using asset-backed securities (ABS), after getting approval from the Shanghai Stock Exchange. ABS is a financial security collateralized by a pool of assets such as loans, leases, credit card debt, royalties or receivables.

This enables DiDi to help partner leasing enterprises raise funds through securitizing their stock assets. Upon completion of the issuance, DiDi’s partner leasing companies will acquire new funding channels and help strengthen general transportation capacities.

Based on DiDi’s business verticals, the program is collateralized by the leasing claims by car leasing enterprises when leasing cars to drivers. DiDi acts as a proxy of the originators, responsible for the coordination of leasing companies, and issues bonds through bundling the underlying assets to the capital market.

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Eva Yoo

Eva Yoo is Shanghai-based tech writer. Reach her at evayoo@technode.com