The Zip Co Ltd (ASX: Z1P) share price is falling today, it's down around 1.7% at the time of writing.
Aside from the sensational IPO listing start by Sezzle Inc (ASX: SZL), the main news out of Zip Co is that it has mandated National Australia Bank Ltd (ASX: NAB) for the Master Trust Programme.
NAB has been mandated to arrange a serious of ABS investor meetings for the establishment of the Zip Master Trust Programme, which was noted in the quarterly update released on 24 July 2019.
Today, Zip Co has advised that the mandate has been confirmed and an indicative term sheet was issued by NAB on 29 July 2019. The indicative term sheet sought expressions of interest for debt funding of $400 million to refinance the funding of existing receivables within Zip's portfolio.
Once the transaction is completed, Zip's total facilities available to fund receivables will increase from $731.5 million (as reported in the last quarterly update) to $931.5 million.
Perpetual Limited's (ASX: PPT) Perpetual Corporate Trust is expected to be appointed as the trustee of the Zip Master Trust at completion. Perpetual is the current trustee of Zip's existing bank warehouse facilities. The transaction is expected to be completed in the next eight weeks.
The expected maturity date for the notes is for two years to August 2021.
Is the Zip Co share price a buy?
Zip Co has grown impressively since it listed, however I'm not sure that it can keep growing strongly in the future without expanding overseas.
There are only so many large retailers in can sign on and there is now plenty of competition building in the buy now, pay later space, particularly from the giants like Visa, MasterCard and PayPal as well as Afterpay Touch Group Ltd (ASX: APT) and others in Australia.
