How Money3 (ASXMNY) NZ$40M Facility Will Support NZ Growth

Summary

  • Money3’s subsidiary Go Car Finance has secured a NZ$40 million facility from Heartland Bank.
  • The new facility would boost loan book growth of Go Car Finance to over NZ$200 million.
  • It will replace existing mezzanine finance facility and improve the cost of funding by over 3%

Money3 Corporation Limited (ASX: MNY), a financial services company, has bagged a NZ$40 million facility from Heartland Bank to aid ongoing loan book growth in the group’s New Zealand operations.

The firm’s New Zealand subsidiary Go Car Finance has secured this three-year facility through a Special Purpose Vehicle (SPV) with Heartland Bank, a well-established New Zealand bank, Money3 said in a regulatory filing on Tuesday.

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The non-bank credit service provider said that the new facility will complement the existing facility already in place with the Bank of New Zealand. As per the company, the new facility will replace existing mezzanine finance facility and improve the cost of funding by in excess of 3%.

Following the announcement, shares of MNY were trading 1.26 per cent higher at A$3.220 on the Australian Securities Exchange (ASX).  

Meanwhile, peer companies, like Bell Financial Group (ASX: BFG) and Moelis Australia (ASX: MOE) were trading higher in the range of 0.5%-0.8%, while Eclipx Group (ASX: ECX) was trailing by 0.4%.

New Facility to Support Go Car Finance’s Loan Book Growth to NZ$200 million

The new facility as well as the previously announced refinance of the Australian A$150 million finance facility puts the group in a very strong funding position, Money3 said. It will support ongoing loan book growth of Go Car Finance to over NZ$200 million from the existing NZ$145 million.

Starting FY22, the company will have funding capacity in place to boost the loan book to over A$800 million. Besides, Money3 Corporation has secured the right funding partners to achieve its objective of growing loan book over A$1 billion.

The deal with Heartland Bank has helped the group to achieve its strategic objective to ensure a diversified funding strategy, with facilities from four separate Banks, two in each country.

Management Comment on New Facility

Commenting on the new facility, Money3 CEO Scott Baldwin said: “Over the past 24 months the Go Car team have executed perfectly on our growth strategy. Growing introduction partnerships across New Zealand and growing a quality loan book allowing us to introduce Heartland Bank to the Group.”

“The new facility along with the existing debt with the Bank of New Zealand will allow the group to further grow our loan book,” Baldwin added.

“Heartland Bank is pleased to support Go Car Finance with funding for its New Zealand loan book. The funding aligns with Heartland Bank’s strategy to diversify business lending and is consistent with our long history of providing motor vehicle finance in New Zealand,” said Chris Flood, CEO, Heartland Bank.

Money3 has operations in Australia and New Zealand with dominance in the used-vehicle finance market. The company has funded over A$1.5 billion of vehicles and personal loans. This year, the group has expanded its product offering into new and commercial vehicle lending in Australia and New Zealand.

The company has achieved strong financial results in the first half of the 2021 financial year. It has reported 32.8 per cent rise in Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA) to A$40.5 million and 26.8 per cent growth in net profit after tax (NPAT) to $19.9 million, as compared to corresponding period.

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