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South Korea’s hypermarket chain Emart has taken out a 1 trillion won ($843 million) loan to fund its 3.44 trillion won acquisition of eBay Korea, with about 160 billion won of the debt securitized into asset-backed securities by special purpose entities.

The loan, which was made on Thursday, comprises two tranches: a 500 billion won variable interest rate loan with a one-year maturity and a 500 billion won fixed rate loan that matures in two years. Emart used land and buildings belonging to some of its branches as collateral to get the loan.

The loan proceeds will be used to fund the supermarket chain’s takeover of eBay Korea. In June this year, Emart agreed to acquire an 80.01% stake in the South Korean unit of the US ecommerce giant for 3.44 trillion won.

The huge size of the deal attracted attention, especially given that Emart’s cash reserves fell substantially short of the acquisition cost, with its cash and cash equivalents standing at approximately 1 trillion won only as of the end of March this year.

Emart has made continued efforts to build up its cash balance, securing a total of 1 trillion won in the first half of this year by selling its Gayang branch and Vietnamese subsidiary. It also raised 520 billion won in a corporate bond sale in August.

Of the 1 trillion won loan, about 160 billion won was securitized on Thursday by two special purpose entities, with each selling 80 billion won in asset-backed securities.

One special purpose entity, credit enhanced by Shinhan Bank, issued asset-backed short-term bonds in two tranches with a three-month maturity, which will continue to be refinanced up to the maturity of the underlying assets.

The other special purpose entity was credit enhanced by Hana Bank. It sold securities backed by the loan in two tranches: the asset-backed commercial paper, which will be refinanced every three month until the maturity of the underlying loan, and the asset-backed loan facility with a two-year maturity.

Asset-backed securities issued by both special purpose entities were rated ‘A1 (sf)’. (Reporting by Hye-rim Pi)