Regulator approves Ant online units’ ABS issues
In what is seen as a positive signal to the market, Chinese regulators have approved asset- backed securities ( ABS) issues by two online lending subsidiaries of the Ant Group. The move follows the suspension of Ant Group’s huge dual IPO in early November.
Halting the mega IPO showed regulators’ clear and unshakable stance on regulating internet finance to fend off potential risks, while approving the ABS issues underscores Beijing’s open and active attitude toward fintech innovation – a key factor in Ant Group’s expansion going forward, industry observers said.
Ant Group is adjusting. After the IPO suspension, some observers predicted that the fintech giant would spin off several businesses to clear the way for its dual IPO plan. Others said that Ant would abandon its IPO in the Chinese mainland and independently list in Hong Kong.
There will be two ABS issues, each worth 10 billion yuan ($ 1.52 billion). One was announced on November 3, the day that the IPO was suspended, and the other on November 6, according to a notice on the Corporate Bond Information Platform of the Shanghai Stock Exchange ( SSE).
The issues were separately approved by the SSE on November 20 and November 23.
The approvals by the SSE were the first for the group after the suspension of the dual IPO. The issuers are two online small- loan entities based in Southwest China’s Chongqing, which operate on Ant Group’s main consumer- focused financing products, Huabei and Jiebei.
The dual IPO, which was widely expected to be the world’s biggest, was halted on November 3.
The SSE accepted another three planned ABS issues by the two lenders, in total equaling 26 billion yuan. Those three issues were announced from early to mid- November.
“Regulatory approval of Ant Group’s ABS issues is an encouraging sign. It puts to rest market speculation that Chinese regulators would take a ‘ one- size- fits- all’ approach to Ant’s innovative financial products, which could potentially sink the business,” Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology, said on Wednesday.