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Securitization Transactions
 12 Months Ended
Dec. 31, 2022
Securitization Transactions [Abstract]  
Securitization Transactions 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 and is required to consolidate the SPE.
The Company securitizes certain credit cards receivable 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 cards receivable 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 December 31, 2022:
SPEsCollateralized debt as of December 31, 2022Interest rateCurrencyMaturity
Mercado Crédito I Brasil Fundo de Investimento Em Direitos Creditórios Não Padronizados$193 
CDI + 2.50%
Brazilian ReaisJune 2025
Fundo de Investimento Em DireitosCreditórios Arandu192 
CDI + 1.75%
Brazilian ReaisJune 2023
Mercado Crédito Fundo de Investimento Em Direitos Creditórios Não Padronizado5 
CDI + 3.50%
Brazilian ReaisAugust 2023
Olimpia Fundo de Investimento Em Direitos Creditórios97 
CDI + 1.25%
Brazilian ReaisNovember 2024
Mercado Crédito II Brasil Fundo De Investimento Em Direitos Creditórios Nao Padronizados217 
CDI + 1.90%
Brazilian ReaisApril 2028
Mercado Crédito Consumo VIII3 
Badlar rates plus 200 basis points with a min 30% and a max 50%
Argentine PesosFebruary 2023
Mercado Crédito Consumo IX9 
Badlar rates plus 200 basis points with a min 30% and a max 52%
Argentine PesosMay 2023
Mercado Crédito Consumo X13 
Badlar rates plus 200 basis points with a min 35% and a max 62%
Argentine PesosJune 2023
Mercado Crédito Consumo XI16 
Badlar rates plus 200 basis points with a min 35% and a max 63%
Argentine PesosAugust 2023
Mercado Crédito Consumo XII16 
Badlar rates plus 200 basis points with a min 35% and a max 70%
Argentine PesosSeptember 2023
Mercado Crédito Consumo XIII16 
Badlar rates plus 200 basis points with a min 35% and a max 74%
Argentine PesosNovember 2023
Mercado Crédito Consumo XIV16 
Badlar rates plus 200 basis points with a min 35% and a max 80%
Argentine PesosOctober 2023
Mercado Crédito Consumo XV16 
Badlar rates plus 200 basis points with a min 35% and a max 92%
Argentine PesosOctober 2023
Mercado Crédito XIII2 
Badlar rates plus 200 basis points with a min 30% and a max 46%
Argentine PesosApril 2023
Mercado Crédito XIV6 
Badlar rates plus 200 basis points with a min 30% and a max 48%
Argentine PesosMarch 2023
Mercado Crédito XV13 
Badlar rates plus 200 basis points with a min 30% and a max 56%
Argentine PesosAugust 2023
Mercado Crédito XVI12 
Badlar rates plus 200 basis points with a min 35% and a max 80%
Argentine PesosSeptember 2023
Mercado Crédito XVII14 
Badlar rates plus 200 basis points with a min 35% and a max 88%
Argentine PesosMarch 2024
Mercado Crédito XVIII22 
Badlar rates plus 200 basis points with a min 35% and a max 92%
Argentine PesosJanuary 2024
Fideicomiso de administración y fuente de pago CIB/3756154 
The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 1.90%
Mexican PesosSeptember 2024
Fideicomiso de administración y fuente de pago CIB/3369206 
The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 3.00%
Mexican PesosApril 2025
$1,238 
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 consolidated financial statements as of December 31, 2022 and 2021, as follows:
December 31,
20222021
Assets(in millions)
Current assets:
Restricted cash and cash equivalents$459 $282 
Credit card receivables and other means of payments, net317 278 
Loans receivable, net799 608 
Total current assets1,575 1,168 
Long-term investments21 13 
Loans receivable, net24 45 
Total non-current assets45 58 
Total assets$1,620 $1,226 
Liabilities
Current liabilities:
Accounts payable and accrued expenses$4 $1 
Loans payable and other financial liabilities535 77 
Other liabilities1 — 
Total current liabilities540 78 
Non-current liabilities:
Loans payable and other financial liabilities703 674 
Total non-current liabilities703 674 
Total liabilities$1,243 $752