Approved by China Securities Regulatory Commission recently, ‘Guotai 1st Tranche Special Asset Management Plan’ (hereinafter referred as Guotai 1st Tranche), launched by Qilu Securities Co., Ltd., will be transferred by listing on Shenzhen Stock Exchange Comprehensive Trading Platform on June 25, 2014. With the creditor’s right of leasing contracts signed by Guotai Leasing Limited Company with the lessees as basic assets, the product falls into 4 prior classes and 1 subordinated class of asset-backed securities, raising CNY1.196 billion in total.
Financial leasing industry provides professional and standardized financial service for the real economy industries, playing a significant role in facilitating the development of industries such as engineering mechanism, transportation equipment and commercial circulation. The General Office of the State Council, and Ministry of Commerce have explicit pointed out in the documents of Opinions on Supporting Steady Growth of Foreign Trade (distributed by the General Office of the State Council (2014) No.19), and Guidance on Promoting the Development of Financial Leasing during the 12th Five-year Plan (distributed by Department of Trade in Services and Commercial Services, Ministry of Commerce (2011), No.487), that financial leasing shall be promoted energetically, enterprises shall be encouraged to liquidize the leasing asset and create innovative financing mode by means of asset-back securitization.
In recent years, financial leasing developed rapidly in China. It was estimated by China Leasing Union that up till the end of May, the number of varies kinds of leasing companies reached 1250 in China, and the capital involved in financial leasing contract reached approximately CNY 2.6 trillion. The launch and listing of ‘Guotai 1st Tranche’ not only provides sustainable financing means for the originators, but also provides a successful practice for the securitization of the assets of the same kind, serving as a way to implement the relevant policy of the state.
Asset Securitization products are flexibly designed, cater the needs of both investing and financing parties, and have controllable risks, representing a key means of SZSE to improve the capacity of serving the real economy with financial services, enrich the market layers and investment products. As of now, 17 asset securitization products have been issued on Shenzhen Market, raising CNY 22.07 billion, and forming a complete project reserve echelon. Apart from the creditor’s right of financial leasing, the basic assets of asset securitization products include various types of assets involving security housing projects, small financing, loan to agricultural projects and poverty alleviation, sewage treatment, power, and expressway. Asset securitization products provide new financial means for supporting the key fields of real economy, for example, local infrastructure and security housing construction, serving small and micro enterprises and agriculture, farmer and rural area. Take the series products of Alibaba Small Loan Products listed on SZSE since July, 2013 for an example, CNY 3.5 billion have been raised for originator during less than one year, with 377 thousand small-and-micro enterprises and individual start-up being served, CNY 9.75 billion small loan being provided cyclically, realizing the original design intention of products of activating the real economy via financial lever.
In the future, centered on the document of Opinion of the State Council on Further Promoting the Sound Development of Capital Market, SZSE will continue to exploit the business mode and serving range of asset securitization financial instrument, liquidize remnant assets, and provide more effective financial support to the real economy.
