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Securitization Transactions | 6 Months Ended
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Jun. 30, 2023
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 (“SPEs”), 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 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 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 June 30, 2023:
SPEs |  | Collateralized debt as of June 30, 2023 |  | Interest rate |  | Currency |  | Maturity
Mercado Crédito I Brasil Fundo de Investimento Em Direitos Creditórios Não Padronizados |  | $ | 209 |  | CDI + 2.50% |  | Brazilian Reais |  | June 2025
Mercado Crédito Fundo de Investimento Em Direitos Creditórios Não Padronizado |  | 1 |  | CDI + 3.50% |  | Brazilian Reais |  | August 2023
Olimpia Fundo de Investimento Em Direitos Creditórios |  | 105 |  | CDI + 1.25% |  | Brazilian Reais |  | November 2024
Mercado Crédito II Brasil Fundo De Investimento Em Direitos Creditórios Nao Padronizados |  | 130 |  | CDI + 1.90% |  | Brazilian Reais |  | April 2028
Seller Fundo De Investimento Em Direitos Creditórios |  | 205 |  | CDI + 1.60% |  | Brazilian Reais |  | March 2026
Seller Fundo De Investimento Em Direitos Creditórios |  | 102 |  | CDI + 1.80% |  | Brazilian Reais |  | May 2026
Mercado Crédito Consumo XI |  | 1 |  | Badlar rates plus 200 basis points with a min 35% and a max 63% |  | Argentine Pesos |  | August 2023
Mercado Crédito Consumo XII |  | 2 |  | Badlar rates plus 200 basis points with a min 35% and a max 70% |  | Argentine Pesos |  | September 2023
Mercado Crédito Consumo XIII |  | 2 |  | Badlar rates plus 200 basis points with a min 35% and a max 74% |  | Argentine Pesos |  | November 2023
Mercado Crédito Consumo XIV |  | 4 |  | Badlar rates plus 200 basis points with a min 35% and a max 80% |  | Argentine Pesos |  | October 2023
Mercado Crédito Consumo XV |  | 7 |  | Badlar rates plus 200 basis points with a min 35% and a max 92% |  | Argentine Pesos |  | October 2023
Mercado Crédito Consumo XVI |  | 12 |  | Badlar rates plus 200 basis points with a min 60% and a max 92% |  | Argentine Pesos |  | December 2023
Mercado Crédito Consumo XVII |  | 13 |  | Badlar rates plus 200 basis points with a min 60% and a max 92% |  | Argentine Pesos |  | January 2024
Mercado Crédito Consumo XVIII |  | 16 |  | Badlar rates plus 200 basis points with a min 60% and a max 92% |  | Argentine Pesos |  | January 2024
Mercado Crédito Consumo XIX |  | 18 |  | Badlar rates plus 200 basis points with a min 60% and a max 92% |  | Argentine Pesos |  | February 2024
Mercado Crédito Consumo XX |  | 22 |  | Badlar rates plus 200 basis points with a min 60% and a max 92% |  | Argentine Pesos |  | March 2024
Mercado Crédito Consumo XXI |  | 21 |  | Badlar rates plus 200 basis points with a min 80% and a max 120% |  | Argentine Pesos |  | June 2024
Mercado Crédito Consumo XXII (*) |  | 20 |  | Badlar rates plus 200 basis points with a min 80% and a max 120% |  | Argentine Pesos |  | June 2024
Mercado Crédito XV |  | 2 |  | Badlar rates plus 200 basis points with a min 30% and a max 56% |  | Argentine Pesos |  | August 2023
Mercado Crédito XVI |  | 5 |  | Badlar rates plus 200 basis points with a min 35% and a max 80% |  | Argentine Pesos |  | September 2023
Mercado Crédito XVII |  | 7 |  | Badlar rates plus 200 basis points with a min 35% and a max 88% |  | Argentine Pesos |  | March 2024
Mercado Crédito XVIII |  | 13 |  | Badlar rates plus 200 basis points with a min 35% and a max 92% |  | Argentine Pesos |  | January 2024
Fideicomiso de administración y fuente de pago CIB/3756 |  | 175 |  | The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 1.90% |  | Mexican Pesos |  | September 2024
Fideicomiso de administración y fuente de pago CIB/3369 |  | 261 |  | The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 3.0% |  | Mexican Pesos |  | April 2025
|  | $ | 1,353 |  |  |  |  |  |
(*)As of June 30, 2023, Loans payable owned by this trust were obtained through private placements. Mercado Crédito Consumo XXII trust made a public bond offering in the Argentine stock market on July 7, 2023. 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 unaudited interim condensed consolidated financial statements as of June 30, 2023 and December 31, 2022 as follows:
| June 30, 2023 |  | December 31, 2022
Assets | (In millions)
Current assets: |  |  |
Restricted cash and cash equivalents | $ | 792 |  |  | $ | 459 |
Short-term investments | 1 |  |  | — |
Credit card receivables and other means of payments, net | 106 |  |  | 317 |
Loans receivable, net | 989 |  |  | 799 |
Total current assets | 1,888 |  |  | 1,575 |
Non-current assets: |  |  |
Long-term investments | 23 |  |  | 21 |
Loans receivable, net | 17 |  |  | 24 |
Total non-current assets | 40 |  |  | 45 |
Total assets | $ | 1,928 |  |  | $ | 1,620 |
Liabilities |  |  |
Current liabilities: |  |  |
Accounts payable and accrued expenses | $ | — |  |  | $ | 4 |
Loans payable and other financial liabilities | 749 |  |  | 535 |
Other liabilities | 4 |  |  | 1 |
Total current liabilities | 753 |  |  | 540 |
Non-current liabilities: |  |  |
Loans payable and other financial liabilities | 604 |  |  | 703 |
Total non-current liabilities | 604 |  |  | 703 |
Total liabilities | $ | 1,357 |  |  | $ | 1,243 |

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