Chinese lending platform Yirendai makes tepid US market debut

Yirendai Ltd, the consumer finance arm of Chinese peer-to-peer (P2P) lender CreditEase, made a tepid U.S. market debut on Friday, with its shares trading as much as 16.5 percent below the offer price.

The company’s initial public offering raised $75 million after its American Depository Shares were priced at $10 each, the midpoint of the expected range of $9-$11.

Yirendai, founded in 2012, is growing rapidly by filling a demand for credit from individuals who find it difficult to obtain loans from traditional Chinese lenders.

Yirendai Chief Financial Officer Dennis Cong told Reuters that their market debut was “a little surprising, given how strong the demand he saw from the investors”.

“The market volatility or the end of the year has some play in it”, he said.

The shares were trading at the IPO price after about 20 minutes, valuing the company at about $585 million. The stock traded between $9.65 and $10.39.

Beijing-based Yirendai is the first Chinese online P2P platform to be listed overseas, joining numerous Chinese financial institutions that listed on the U.S. exchanges this year.

Chinese financial institutions have raised about $59.6 billion so far in IPOs and follow-ons, the second largest raising after 2010, according to Thomson Reuters data.

Yirendai offers prime borrowers in China access to unsecured credit by connecting them to investors through its online marketplace, similar to the peer-to-peer model of U.S. lender LendingClub Corp, which went public late last year.

The company, which has about 6.7 million registered users, says it facilitated $984 million of loans in the nine months ended Sept. 30, up from $41 million in all of 2013.

CreditEase‘s shareholders include Morgan Stanley’s Asia private equity arm, Kleiner Perkins Caufield & Byers, and IDG Capital Partners.

Yirendai founder and Executive Chairman Ning Tang, who owns about 38 percent stake in the company after the offering, has committed to buy $30 million shares at the IPO price. Along with the IPO, the company sold $10 million shares to Internet company Baidu Inc through a concurrent private placement.

Earlier this week, police in China said they had frozen and seized assets from Ezubao, the country’s largest P2P platform by loans, as part of an investigation.

Morgan Stanley, Credit Suisse, Needham & Co and China Renaissance are among the underwriters of the IPO.

Also Read:

Singapore: P2P payments venture Kashmi raises $497k seed round

P2P lending, payment solutions, on-demand revolution are upcoming trends in SEA: Khailee Ng

Singapore’s M&S Partnerts invests $250K in P2P lending marketplace Faircent

Reuters

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.