Grab secures $500m syndicated facility for vehicle fleet financing

The facility is part of the US$700 million in debt financing announced by Grab last October.
The facility is part of the US$700 million in debt financing announced by Grab last October.PHOTO: ST FILE

SINGAPORE - Ride-hailing firm Grab announced on Sunday (June 17) that it has secured a $500 million five-year asset-backed syndicated facility from HSBC Singapore to finance the growth of its vehicle fleet here.

The facility is part of the US$700 million in debt financing announced by Grab last October. The deal is a scalable, ring-fenced solution with a potential upsize of S$800 million. The drivers who lease the cars will then form the supply base to its Grab Car business.

Ming Maa, president of Grab, said: "Grab is currently in 217 cities across South-east Asia, and as we expand beyond ride-hailing to become the leading O2O (online to offline) mobile platform in the region, it is crucial that we have the financing necessary to facilitate our rapid growth."

The deal was 2.5 times oversubscribed, with a total of 16 bank and non-bank financial institutions participating.

Shaun Sakhrani, director of structured finance, HSBC Singapore, noted that structured finance solutions of this nature are "increasingly important" for non-traditional companies, in particular start-ups operating in the digital economy.

"The usual corporate facilities with corporate-level covenants may not be feasible in helping these firms unlock access to the debt capital markets," he said.

"The overwhelming response from a wide range of banks and financial institutions demonstrates the strong appetite for facilities of this nature as well as the market's belief in Grab as South-east Asia's leading on-demand transportation platform."

HSBC acted as sole structuring advisor, mandated lead arranger and bookrunner of the facility.

Just last week, Grab announced that Toyota has agreed to pump in an additional US$1 billion into the company - an investment said to be the largest by a carmaker in the global ride-hailing sector.