XPeng reported today that its business unit, Guangzhou Xiaopeng Automotive Financial Leasing Co Ltd, had completed the RMB 964 million (or $134 million) ABS offering on the Shanghai Stock Exchange, as per CnEVPost.
After issuing its first ABS on the Shenzhen Stock Exchange earlier this year, XPeng is now expanding its direct financing sources on the two leading exchanges in China with its second ABS issue in the domestic capital market in Shanghai.
ABS offering
Notably, the Senior A tranche ABS issue for RMB 805 million has an expected maturity date of September 13, 2024, a coupon rate of 2.80%, and a debt rating of AAA. On the other hand, the Senior B tranche ABS worth RMB 39 million has an expected maturity date of November 14, 2024, an AA+ debt rating, and a 3.00% coupon rate.
| Worth | Debt Rating | Expected Maturity Date | Coupon Rate | |
| Senior A tranche | RMB 805 million | AAA | 2024.9.13 | 2.80% |
| Senior B tranche | RMB 39 million | AA+ | 2024.11.14 | 3.00% |
XPeng’s ESG initiatives encourage investors
Due to the low cost of financing in China, these rates are significantly lower than XPeng’s ABS offering in Shenzhen. China’s standard one-year loan prime rate (LPR) is currently 3.65%, while the five-year or longer LPR is 4.3%.
XPeng claims that the completed ABS issuance implies that investors value XPeng’s efforts to achieve carbon neutrality and uphold ethical business practices.
The MSCI ESG Research has given XPeng its third consecutive AA rating, placing it first among all automakers globally for ESG performance. XPeng was given an AA MSCI ESG rating for 2022 last September 27.
Furthermore, XPENG obtained an industry-leading ESG score of 49 on September 23 from the Dow Jones Sustainability Index (DJSI), the highest score among Chinese automakers.
Guangzhou Xiaopeng Automotive Financing Lease Co Ltd granted RMB 775 million of ABS for carbon-neutral projects on the Shenzhen Stock Exchange, according to XPeng’s announcement on February 22.
The senior A tranche ABS for RMB 624 million had a 3% coupon rate and an AAA debt rating. Meanwhile, the senior B ABS for RMB 31 million had a coupon rate of 3.50% and a debt grade of AA+.
Interestingly, similar assets were previously issued in China by XPeng’s local rival NIO to broaden its direct financing sources.
On the other hand, NIO Financial Leasing Co. Ltd. issued an ABS on the Shanghai Stock Exchange on October 29, 2021, with a size of RMB1.03 billion. Additionally, it issued RMB 1.03 billion in asset-backed medium-term notes (ABNs) on March 3 in the Chinese interbank market.
About XPeng Inc.
XPeng Inc. (“XPENG”) is a major Chinese electric vehicle firm that creates, develops, produces, and sells smart EVs that cater to a sizable and expanding market of tech-savvy middle-class consumers. Its goal is to influence the future of mobility by transforming Smart EVs through technology and data.
