* E-commerce giant securitises online shopping loans

By Ina Zhou

HONG KONG, Nov 28 (IFR) - Alibaba Group Holding has now been ramping up its Singles' Day online shopping frenzy for eight years, but, this time, it has added a new ingredient to the celebrity-studded extravaganza: securitisation.

Last week, a unit of Alibaba-backed Ant Financial sold 4 billion renminbi ($578 million) securities backed against small loans granted to consumers on November 11, also known as "Double 11" day. This is a festival that started in Nanjing in the 1990s to celebrate singlehood, but has since turned into the world's largest online shopping day.

The enthusiasm spread to the asset-backed securities, which were well received, despite a liquidity squeeze in the onshore market.

Although it represented just a small portion of a record 120.7 billion renminbi in sales that day across Alibaba's platforms, the transaction underlined the financial ambitions of the e-commerce giant, which is yearning to challenge traditional banks with its sprawling online credit and banking empire.

ABS RUSH

Chongqing Alibaba Small Loan provided the underlying loans for the ABS through an online consumer credit portal, Ant Check Later ("Huabei" in Chinese), where 604.8 million purchases were made on November 11.

The portal allows consumers to pay for purchases made on various e-commerce platforms under Alibaba Group, including Taobao, one month after orders are delivered. Consumers can also chose to pay in instalments.

With the Shanghai Stock Exchange's approval, the ABS were privately placed last Monday to qualified institutional investors with net assets of over 100 million renminbi and asset management products.

A 1.8 billion renminbi senior A1 tranche, due on December 21 this year, was priced at par to yield 3.35 percent. A 1.624 billion renminbi senior A2 tranche of six months was priced at 3.55 percent, while a 256 million renminbi senior B tranche of 12 months was offered at 4.0 percent. The three senior tranches scored AAA, AAA and AA- ratings, respectively, from Shanghai Brilliance Credit Rating & Investors Service.

Chongqing Alibaba Small Loan retained 320 million renminbi in unrated subordinated tranches as credit enhancement to the senior tranches.

The transaction was launched amid rising onshore rates, but still managed to close twice oversubscribed.

In the past two weeks, the overnight Shanghai Interbank Offered Rate, a benchmark for onshore funding cost, jumped over 20bp, forcing dozens of issuers to postpone bond deals.

"The pricing reflected a tighter liquidity condition at the time of issuance, but the deal still had the support of decent demand," said a banker with Tebon Securities, the manager on the ABS.