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Securitization Transactions | 9 Months Ended
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Sep. 30, 2022
Securitization Transactions [Abstract] |
Securitization Transactions | 12. Securitization Transactions The process of securitization consists of the issuance of securities collateralized by a pool of assets through a special purpose entity, often under a VIE. The Company securitizes financial assets associated with its credit cards and loans receivable portfolio. The Company’s securitization transactions typically involve the legal transfer of financial assets to bankruptcy remote special purpose entities (“SPEs”). The Company generally retains economic interests in the collateralized securitization transactions, which are retained in the form of subordinated interests. For accounting purposes, the Company is generally precluded from recording the transfers of assets in securitization transactions as sales or is required to consolidate the SPE. The Company securitizes certain credit card receivables related to users’ purchases through Argentine and Chilean SPEs. Under the SPE contracts, the Company has determined that it has no obligation to absorb losses or the right to receive benefits of the SPEs that could be significant because it does not retain any equity certificate of participation or subordinated interest in the SPEs. As the Company does not control the vehicles, its assets, liabilities and related results are not consolidated in the Company’s financial statements. Additionally, the Company securitizes certain credit card receivables related to users’ purchases through Brazilian SPEs. Under the SPE contracts, the Company has determined that it has the obligation to absorb losses or the right to receive benefits of the SPEs that could be significant because it retains subordinated interest in the SPEs. As the Company controls the vehicles, the assets, liabilities and related results are consolidated in its financial statements. The Company securitizes certain loans receivable through Brazilian, Argentine and Mexican SPEs, formed to securitize loans receivable provided by the Company to its users or purchased from financial institutions that grant loans to the Company’s users through Mercado Pago. According to the SPE contracts, the Company has determined that it has both the power to direct the activities of the entity that most significantly impact the entity’s performance and the obligation to absorb losses or the right to receive benefits of the entity that could be significant because it retains the equity certificates of participation and would therefore also be consolidated. When the Company controls the vehicle, it accounts for the securitization transactions as if they were secured financing and therefore the assets, liabilities and related results are consolidated in its financial statements. ‎ The following table summarizes the Company’s collateralized debt under securitization transactions, as of September 30, 2022:
SPEs |  | Collateralized debt as of September 30, 2022 |  | Interest rate |  | Currency |  | Maturity
Mercado Crédito I Brasil Fundo de Investimento Em Direitos Creditórios Não Padronizados |  | 186 |  | CDI + 2.50% |  | Brazilian Reais |  | May 2025
Fundo de Investimento Em Direitos Creditórios Arandu |  | 185 |  | CDI + 1.75% |  | Brazilian Reais |  | June 2023
Mercado Crédito Fundo de Investimento Em Direitos Creditórios Não Padronizado |  | 12 |  | CDI + 3.50% |  | Brazilian Reais |  | August 2023
Olimpia Fundo de Investimento Em Direitos Creditórios |  | 97 |  | CDI + 1.25% |  | Brazilian Reais |  | November 2024
Mercado Crédito II Brasil Fundo De Investimento Em Direitos Creditórios Nao Padronizados |  | 209 |  | CDI + 1.90% |  | Brazilian Reais |  | May 2028
Mercado Crédito Consumo VII |  | 1 |  | Badlar rates plus 200 basis points with a min 30% and a max 46% |  | Argentine Pesos |  | October 2022
Mercado Crédito Consumo VIII |  | 12 |  | Badlar rates plus 200 basis points with a min 30% and a max 50% |  | Argentine Pesos |  | February 2023
Mercado Crédito Consumo IX |  | 16 |  | Badlar rates plus 200 basis points with a min 30% and a max 52% |  | Argentine Pesos |  | May 2023
Mercado Crédito Consumo X |  | 16 |  | Badlar rates plus 200 basis points with a min 35% and a max 62% |  | Argentine Pesos |  | June 2023
Mercado Crédito Consumo XI |  | 19 |  | Badlar rates plus 200 basis points with a min 35% and a max 63% |  | Argentine Pesos |  | August 2023
Mercado Crédito Consumo XII |  | 19 |  | Badlar rates plus 200 basis points with a min 35% and a max 70% |  | Argentine Pesos |  | September 2023
Mercado Crédito Consumo XIII |  | 19 |  | Badlar rates plus 200 basis points with a min 35% and a max 74% |  | Argentine Pesos |  | November 2023
Mercado Crédito Consumo XIV (*) |  | 15 |  | Badlar rates plus 200 basis points with a min 35% and a max 80% |  | Argentine Pesos |  | July 2023
Mercado Crédito XII |  | 1 |  | Badlar rates plus 200 basis points with a min 30% and a max 46% |  | Argentine Pesos |  | November 2022
Mercado Crédito XIII |  | 6 |  | Badlar rates plus 200 basis points with a min 30% and a max 46% |  | Argentine Pesos |  | April 2023
Mercado Crédito XIV |  | 15 |  | Badlar rates plus 200 basis points with a min 30% and a max 48% |  | Argentine Pesos |  | March 2023
Mercado Crédito XV |  | 16 |  | Badlar rates plus 200 basis points with a min 30% and a max 56% |  | Argentine Pesos |  | August 2023
Mercado Crédito XVI (*) |  | 12 |  | Badlar rates plus 200 basis points with a min 35% and a max 80% |  | Argentine Pesos |  | August 2023
Fideicomiso de administración y fuente de pago CIB/3756 |  | 149 |  | The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 1.9% |  | Mexican Pesos |  | October 2023
Fideicomiso de administración y fuente de pago CIB/3369 |  | 182 |  | The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 3.0% |  | Mexican Pesos |  | April 2024
|  | 1,187 |  |  |  |  |  |
(*) | As of September 30, 2022, Loans payables owned by these trusts were obtained through private placements. Mercado Crédito XVI and Mercado Crédito Consumo XIV trusts made a public bond offering in the Argentine stock market on October 21, 2022 and October 28, 2022, respectively.
This secured debt is issued by the SPEs and includes collateralized securities used to fund the Company’s Fintech business. The third-party investors in the securitization transactions have legal recourse only to the assets securing the debt and do not have recourse to the Company. Additionally, the cash flows generated by the SPEs are restricted to the payment of amounts due to third-party investors, but the Company retains the right to residual cash flows. ‎ The assets and liabilities of the SPEs are included in the Company’s interim condensed consolidated financial statements as of September 30, 2022 and December 31, 2021 as follows:
| September 30, |  | December 31,
| 2022 |  | 2021
Assets | (In millions)
Current assets: |  |  |  |  |
Restricted cash and cash equivalents | $ | 421 |  | $ | 282
Credit card receivables and other means of payments, net |  | 295 |  |  | 278
Loans receivable, net |  | 930 |  |  | 608
Total current assets |  | 1,646 |  |  | 1,168
Non-current assets: |  |  |  |  |
Long-term investments |  | 15 |  |  | 13
Loans receivable, net |  | 26 |  |  | 45
Deferred tax assets |  | 37 |  |  | 19
Total non-current assets |  | 78 |  |  | 77
Total assets | $ | 1,724 |  | $ | 1,245
Liabilities |  |  |  |  |
Current liabilities: |  |  |  |  |
Accounts payable and accrued expenses | $ | 1 |  | $ | 1
Loans payable and other financial liabilities |  | 372 |  |  | 77
Taxes payable |  | 38 |  |  | 23
Other liabilities |  | 1 |  |  | —
Total current liabilities |  | 412 |  |  | 101
Non-current liabilities: |  |  |  |  |
Loans payable and other financial liabilities |  | 815 |  |  | 674
Total non-current liabilities |  | 815 |  |  | 674
Total liabilities | $ | 1,227 |  | $ | 775

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