On June 25, Ping An Bank No. 1 Petty Consumer Loan Assets Backed Securities were listed on the Shanghai Stock Exchange (SSE), with listed product varieties being 01 level in class A (“14 Ping An 01”), 02 level in class A (“14 Ping An 02”), and class B (“14 Ping An 03”).
The Ping An Credit Assets Backed Securities listed and traded on the SSE are registered and held in custody at China Government Securities Depository Trust & Clearing Co., Ltd. (CDC). This symbolizes the debut of product of credit asset securitization on the SSE market, a great progress made in terms of the expanded pilot of credit asset securitization in China, and a great leap forward for the interflow of the bond markets. After the listing of Ping An Credit Assets Backed Securities, financial institutions, wealth management products issued by financial institutions, QFIIs/RQFIIs, and non-financial-institution legal persons meeting the requirements of suitability management for investors in credit assets backed securities may all participate in trading on the secondary market of the SSE.
Listing and trading of Ping An Credit Assets Backed Securities on the SSE’s market meets the requirements of relevant authorities in implementing the “Guiding Opinions on Economic Restructuring, Transformation, and Upgrading Supported by Finance” issued by the State Council and the decision on further expanding the pilot of credit asset securitization and the listing of quality credit assets backed securities on exchanges made at the Executive Meeting of the State Council, which will effectively facilitate the interflow of the bond markets, promote the development of the market for credit asset securitization, help enlarge the investor groups for credit assets backed securities, disperse risks in the banking system, and vitalize funds to support micro and small enterprises’ growth and adjustments to the economic structure. As credit assets backed securities are only issued and traded on the interbank market before, the China Banking Regulatory Commission and the China Securities Regulatory Commission regard listing of credit assets backed securities on exchanges as one of the key tasks for expanding the pilot of credit asset securitization, and guide the SSE and CDC to confirm the schemes and business rules for the pilot, as well as launch the pilot in order.
According to relevant documents, the total size of Ping An Bank No. 1 Petty Consumer Loan Assets Backed Securities is RMB2.631 billion. The product has 3 levels: 01 level in class A, 02 level in class A, and class B, with the issuance lines respectively up to RMB1.21 billion (45.99%), RMB1.341 billion (50.97%), and RMB79,855,239 (3.04%). 01 level in class A and 02 level in class A will be issued publicly by means of book building. According to the issuance result, the coupon rates for 01 level in class A and 02 level in class A are 5.30% and 5.60% respectively, with the subscription ratios being 1.5 and 1.38 respectively, meeting the expectation of the market and the current interest rate. Judging from the subscription, non-bank institutions play an active part in the subscription, with a rapid increase in proportion. This suggests that a diversified investor structure on the SSE market will facilitate “moving out of the balance sheet” of credit assets and risk dispersion, so as to promote sound growth of the market for credit asset securitization.
According to an official of the SSE, the SSE will launch the pilot of issuance and trading of credit assets backed securities, and encourage listing and trading of more quality credit assets backed securities on exchange. Besides, with the guidance of relevant authorities, the SSE will improve the mechanisms for issuance and trading of credit assets backed securities, make all-round preparation, and promote the expanded pilot of credit asset securitization, in a bid to better the interflow of the bond markets in China.
