SHANGHAI, March. 16, 2020 -- Cango, Inc. (NYSE: CANG) ("Cango" or the "Company"), a leading automotive transaction service platform in China, today announced that its subsidiary Shanghai Chejia Financial Leasing Co. Ltd. (“Chejia”) completed the issuance (the “Issuance”) of RMB964 million asset-backed securities (“ABS”). The Issuance currently represents the Company’s largest ABS issuance to date, and the ABS was listed on the Shenzhen Stock Exchange on March. 6, 2020. This is the Company’s first ABS issuance under its Chejia Auto Financial Leasing Phase 1 - 5 ABS Special Plan (the “Plan”). A shelf offering of up to RMB3 billion ABS under the Plan was approved by the Shenzhen Stock Exchange in January 2020.

The shelf offering mechanism, a financing initiative by the Shenzhen Stock Exchange to support the growth of leading companies in the auto finance industry, enabled the Company’s subsidiary Chejia to register a new ABS issuance and issue portions of the offering over a certain time period without re-registering the offering. The successful Issuance under the shelf offering mechanism is expected to further diversify the Company’s financing arrangements and improve the efficiency of its capital operations. In addition, the Issuance is also a testament to the recognition of Cango’s proven business model and industry-leading asset management capabilities from PRC securities regulators and the capital market as a whole.

The ABSs are backed by assets from Chejia’s financial leasing receivable and other related security interests under Chejia’s lease contracts with its lessees, which have consistently delivered strong cash flows. The ABSs are divided into (i) a senior A class in the principal amount of RMB750 million, rated “AAA” by China Lianhe Credit Rating Co., Ltd. (“Lianhe Credit Rating”) and accounting for approximately 77.8% of the Issuance, (ii) a senior B class in the principal amount of RMB80 million, rated “AA+” by Lianhe Credit Rating and accounting for approximately 8.3% of the Issuance, and (iii) a subordinated class in the principal amount of RMB134 million, accounting for approximately 13.9% of the Issuance.

"The successful issuance of our asset-backed securities highlights our ability to leverage the domestic capital market,” commented Mr. Jiayuan Lin, Chief Executive Officer of Cango. “The Issuance was completed at the peak of the coronavirus outbreak, which has adversely and significantly impacted the operations of all industries in China, including automotive-related industries. Following the outbreak, we immediately established a special task force to implement health and safety measures for our employees and partnered auto dealers. In February, we adopted a flexible working schedule and utilized technology for online collaboration between teams.”

Mr. Lin added, “It is worth noting that we began optimizing our organizational structure in the second half of 2019 to improve our operating efficiency and enhance the quality of our growth. The effectiveness of our optimization can be observed since the start of the epidemic. As we were able to mobilize our employees into one cohesive unit, we have mitigated some of the epidemic’s negative impacts on our business. Furthermore, once the outbreak is contained in China, the demands for automobiles and related services are expected to recover rapidly. Therefore, as the epidemic is not expected to alter the overarching growth trajectory of the auto industry, we remain fully confident in the long-term growth prospects of China’s auto market despite this temporary disruption. Our successful issuance of asset-backed securities serves as a clear demonstration of the capital market’s confidence in our businesses.”