XML 47 R31.htm IDEA: XBRL DOCUMENT v3.24.0.1
SECURITIZATION TRANSACTIONS
 12 Months Ended
Dec. 31, 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 card receivables 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 and 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 December 31, 2023:
SPEsCollateralized debt as of December 31, 2023Interest rateCurrencyMaturity
Mercado Crédito I Brasil Fundo de Investimento Em Direitos Creditórios Não Padronizados$208 
CDI + 2.50%
Brazilian ReaisMay 2025
Mercado Crédito Fundo de Investimento Em Direitos Creditórios Não Padronizado17 
CDI + 3.50%
Brazilian ReaisAugust 2025
Olimpia Fundo de Investimento Em Direitos Creditórios104 
CDI + 1.25%
Brazilian ReaisNovember 2024
Mercado Crédito II Brasil Fundo De Investimento Em Direitos Creditórios Nao Padronizados151 
CDI + 2.35%
Brazilian ReaisJanuary 2030
Seller Fundo De Investimento Em Direitos Creditórios208 
CDI + 1.60%
Brazilian ReaisMarch 2026
Seller Fundo De Investimento Em Direitos Creditórios104 
CDI + 1.80%
Brazilian ReaisMay 2026
Seller Fundo De Investimento Em Direitos Creditórios42 
CDI + 1.40%
Brazilian ReaisSeptember 2026
Seller Fundo De Investimento Em Direitos Creditórios21 
CDI + 1.60%
Brazilian ReaisNovember 2026
Mercado Crédito Consumo XIX1 
Badlar rates plus 200 basis points with a min 60% and a max 92%
Argentine PesosFebruary 2024
Mercado Crédito Consumo XX5 
Badlar rates plus 200 basis points with a min 60% and a max 92%
Argentine PesosMarch 2024
Mercado Crédito Consumo XXI7 
Badlar rates plus 200 basis points with a min 80% and a max 120%
Argentine PesosJune 2024
Mercado Crédito Consumo XXII8 
Badlar rates plus 200 basis points with a min 80% and a max 120%
Argentine PesosJune 2024
Mercado Crédito Consumo XXIII8 
Badlar rates plus 200 basis points with a min 80% and a max 120%
Argentine PesosAugust 2024
Mercado Crédito Consumo XXIV8 
Badlar rates plus 200 basis points with a min 100% and a max 140%
Argentine PesosOctober 2024
Mercado Crédito Consumo XXV9 
Badlar rates plus 200 basis points with a min 100% and a max 150%
Argentine PesosNovember 2024
Mercado Crédito Consumo XXVI9 
Badlar rates plus 200 basis points with a min 100% and a max 160%
Argentine PesosNovember 2024
Mercado Crédito Consumo XXVII9 
Badlar rates plus 200 basis points with a min 100% and a max 180%
Argentine PesosMarch 2025
Mercado Crédito XIX6 
Badlar rates plus 200 basis points with a min 100% and a max 140%
Argentine PesosAugust 2024
Mercado Crédito XX4 
Badlar rates plus 200 basis points with a min 100% and a max 170%
Argentine PesosDecember 2024
Fideicomiso de administración y fuente de pago CIB/3756247 
The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 2.35%
Mexican PesosAugust 2026
Fideicomiso de administración y fuente de pago CIB/336930 
The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 7.0%
Mexican PesosApril 2025
Fideicomiso de administración y fuente de pago CIB/3369269 
The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 3.0%
Mexican PesosApril 2025
$1,475 
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 audited consolidated financial statements as of December 31, 2023 and 2022, as follows:
December 31,
20232022
Assets(In millions)
Current assets:
Restricted cash and cash equivalents$355 $459 
Credit card receivables and other means of payments, net105 317 
Loans receivable, net1,198 799 
Total current assets1,658 1,575 
Non-current assets:
Long-term investments23 21 
Loans receivable, net27 24 
Total non-current assets50 45 
Total assets$1,708 $1,620 
Liabilities
Current liabilities:
Accounts payable and accrued expenses$— $4 
Loans payable and other financial liabilities693 535 
Other liabilities1 1 
Total current liabilities694 540 
Non-current liabilities:
Loans payable and other financial liabilities782 703 
Total non-current liabilities782 703 
Total liabilities$1,476 $1,243