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SECURITIZATION TRANSACTIONS | 6 Months Ended
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Jun. 30, 2024
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 or is required to consolidate the SPE. The Company securitizes certain credit card receivables related to users’ purchases through Chilean SPEs. Under these 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 these 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, 2024:
SPEs |  | Collateralized debt as of June 30, 2024 (In millions) |  | Interest rate |  | Currency |  | Maturity
Mercado Crédito I Brasil Fundo de Investimento Em Direitos Creditórios Não Padronizados |  | $ | 181 |  | CDI + 2.50% |  | Brazilian Reais |  | May 2025
Mercado Crédito Fundo de Investimento Em Direitos Creditórios Não Padronizado |  | 16 |  | CDI + 3.50% |  | Brazilian Reais |  | August 2025
Olimpia Fundo de Investimento Em Direitos Creditórios |  | 75 |  | CDI + 1.25% |  | Brazilian Reais |  | November 2024
Mercado Crédito II Brasil Fundo De Investimento Em Direitos Creditórios Nao Padronizados |  | 215 |  | CDI + 2.35% |  | Brazilian Reais |  | January 2030
Seller Fundo De Investimento Em Direitos Creditórios |  | 183 |  | CDI + 1.60% |  | Brazilian Reais |  | March 2026
Seller Fundo De Investimento Em Direitos Creditórios |  | 91 |  | CDI + 1.80% |  | Brazilian Reais |  | May 2026
Seller Fundo De Investimento Em Direitos Creditórios |  | 36 |  | CDI + 1.40% |  | Brazilian Reais |  | September 2026
Seller Fundo De Investimento Em Direitos Creditórios |  | 18 |  | CDI + 1.60% |  | Brazilian Reais |  | November 2026
Mercado Crédito Consumo XXVI |  | 3 |  | Badlar rates plus 200 basis points with a min 100% and a max 160% |  | Argentine Pesos |  | July - November 2024 (2)
Mercado Crédito Consumo XXVII |  | 9 |  | Badlar rates plus 200 basis points with a min 100% and a max 180% |  | Argentine Pesos |  | August 2024 - March 2025 (2)
Mercado Crédito Consumo XXVIII |  | 11 |  | Badlar rates plus 200 basis points with a min 100% and a max 190% |  | Argentine Pesos |  | September 2024 - April 2025 (2)
Mercado Crédito Consumo XXIX |  | 11 |  | Badlar rates plus 200 basis points with a min 75% and a max 155% |  | Argentine Pesos |  | October 2024 - March 2025 (2)
Mercado Crédito Consumo XXX |  | 12 |  | Badlar rates plus 200 basis points with a min 75% and a max 155% |  | Argentine Pesos |  | November 2024 - April 2025 (2)
Mercado Crédito Consumo XXXI |  | 16 |  | Badlar rates plus 200 basis points with a min 45% and a max 125% |  | Argentine Pesos |  | December 2024 - March 2025 (2)
Mercado Crédito Consumo XXXII |  | 18 |  | Badlar rates plus 200 basis points with a min 25% and a max 80% |  | Argentine Pesos |  | January 2025
Mercado Crédito Consumo XXXIII |  | 25 |  | Badlar rates plus 200 basis points with a min 5% and a max 60% |  | Argentine Pesos |  | March - April 2025 (2)
Mercado Crédito Consumo XXXIV (1) |  | 18 |  | Badlar rates plus 200 basis points with a min 15% and a max 60% |  | Argentine Pesos |  | April - July 2025 (2)
Mercado Crédito XIX |  | 1 |  | Badlar rates plus 200 basis points with a min 100% and a max 140% |  | Argentine Pesos |  | July 2024 - August 2025 (2)
Mercado Crédito XX |  | 5 |  | Badlar rates plus 200 basis points with a min 100% and a max 170% |  | Argentine Pesos |  | September - December 2024 (2)
Mercado Crédito XXI |  | 6 |  | Badlar rates plus 200 basis points with a min 45% and a max 125% |  | Argentine Pesos |  | January - March 2025 (2)
Mercado Crédito XXII |  | 6 |  | Badlar rates plus 200 basis points with a min 15% and a max 70% |  | Argentine Pesos |  | March - April 2025 (2)
Mercado Crédito XXIII (1) |  | 14 |  | Badlar rates plus 200 basis points with a min 15% and a max 60% |  | Argentine Pesos |  | May - June 2025 (2)
SPEs |  | Collateralized debt as of June 30, 2024 (In millions) |  | Interest rate |  | Currency |  | Maturity
Fideicomiso de administración y fuente de pago CIB/3756 |  | 229 |  | The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 2.35% |  | Mexican Pesos |  | August 2026
Fideicomiso de administración y fuente de pago CIB/3369 |  | 33 |  | The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 7.0% |  | Mexican Pesos |  | July 2027
Fideicomiso de administración y fuente de pago CIB/3369 |  | 249 |  | The equilibrium interbank interest rate published by Banco de Mexico in the Diario Oficial plus 2.8% |  | Mexican Pesos |  | July 2027
|  | $ | 1,481 |  |  |  |  |  |
(1) As of June 30, 2024, Loans payables owned by these trusts were obtained through private placements. Mercado Crédito Consumo XXXIV trust made a public bond offering in the Argentine stock market on July 15, 2024. Mercado Crédito XXIII trust made a public bond offering in the Argentine stock market on July 4, 2024. (2) Minimum and maximum maturity depending on the applicable interest rate within the range. 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, 2024 and December 31, 2023 as follows:
| June 30, 2024 |  | December 31, 2023
Assets | (In millions)
Current assets: |  |  |
Restricted cash and cash equivalents | $ | 226 |  |  | $ | 355 |
Credit card receivables and other means of payments, net | 61 |  |  | 105 |
Loans receivable, net of allowances | 1,263 |  |  | 1,198 |
Total current assets | 1,550 |  |  | 1,658 |
Non-current assets: |  |  |
Long-term investments | 18 |  |  | 23 |
Loans receivable, net of allowances | 54 |  |  | 27 |
Total non-current assets | 72 |  |  | 50 |
Total assets | $ | 1,622 |  |  | $ | 1,708 |
Liabilities |  |  |
Current liabilities: |  |  |
Loans payable and other financial liabilities | $ | 424 |  |  | $ | 693 |
Other liabilities | 1 |  |  | 1 |
Total current liabilities | 425 |  |  | 694 |
Non-current liabilities: |  |  |
Loans payable and other financial liabilities | 1,057 |  |  | 782 |
Total non-current liabilities | 1,057 |  |  | 782 |
Total liabilities | $ | 1,482 |  |  | $ | 1,476 |

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