Innovative Way Of Financing And Investment To Boost The Development Of Infrastructure Sector - Shenzhen Stock Exchange Completes Augmentation Of The First PPP Asset Securitization Project

Shenzhen Stock Exchange (SZSE) officially accepted the “Asset-backed Special Plan of GF Hengjin-Rising Dongjiang Environment Humen Lvyuan PPP Project” (hereinafter referred to as “Lvyuan PPP Special”) on March 8th and finished on March 10th the argumentation on the project which will be issued soon. Lvyuan PPP Special is the first implemented project of SZSE in carrying out the spirit of Circular of the National Development and Reform Commission and the China Securities Regulatory Commission on Boosting the Asset Securitization of Public Private Partnerships (PPP) in Traditional Infrastructure Sector (Fa Gai Tou Zi [2016] No. 2698). Also, it is an important expression of SZSE’s serving supply-side structural reform and innovating the way of financing and investment in the field of constant return.

With regard to Lvyuan PPP Special, its planned issuing scale amounts to 320 million yuan, its manager is GF Securities Asset Management (Guangdong) Co., Ltd. and its basic asset is the usufruct of sewage treatment fees of Dongguan Humen Lvyuan Water Co., Ltd. PPP projects utilize social capital to develop the key areas of people’s livelihood including infrastructure construction and public services and feature relatively stable cash flow and long asset maturity. They accord with the asset securitization requirements on the cash flow of basic assets and meet the needs of market investment and financing parties, which enable them to be the ideal industry for carrying out asset securitization. Accordingly, asset securitization is taken as a crucial means of revitalizing stock assets, speeding up the recovery of social investors’ capital and enhancing the level of PPP development.

Since the implementation of the record-keeping system, SZSE has actively served the actual needs in real economy and boosted the innovation of securitization products, having formed eights categories of assets, namely, infrastructure construction, affordable housing, public utilities, corporate accounts receivable, financial leasing, commercial real estate, admission tickets and petty loans. As a result, an asset securitization product system with Shenzhen market characteristics has primarily taken shape. Next, SZSE will keep improving the work flow of “review upon submission with responsibilities shouldered by the dedicated personnel in place” and further implement the supporting measures for PPP securitization. Moreover, on the basis of reinforcing risk prevention, SZSE will provide strong support in facilitating PPP projects with capital market access and, propelling the sound development of PPP projects in infrastructure sector.