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Approved by China Securities Regulatory Commission recently, Orient Securities Asset Management-Alibaba No.1-10 Special Asset Management Plan, launched by Shanghai Orient Securities Asset Management Company Limited, will be transferred through Shenzhen Stock Exchange Comprehensive Trading Platform. The debut of the product indicates the emergence of an additional new type of asset among the asset securitization products series. The product, with the creditor’ rights of the loan issued to small and micro enterprises by Alibaba Small Loan Company as the basic asset, will be issued in 10 tranches irregular within 3 years, with the quota of each tranche ranging from CNY200 million to CNY500 million. Given that small loan asset is featured with short duration and randomization of borrowing and repaying, the product adopts recycling purchase mode of trading structure, i.e. as soon as basic asset related creditor’ right has been repaid, the fund attained can be used cyclically in purchasing new qualified small loan assets. Even though this trading structure, capable of resolving the duration matching problem of short-term loan asset and long-term securitization products, has become a mature practice in overseas market, it is the first trial in the domestic asset securitization market.
By virtue of the users’ data built-up via Alibaba e-commerce platform, Alibaba Small Loan, combining with the internet loan mode and under the premise of effective identification and risk control, is an advantageous attempt in resolving the difficulty of financing confronted with by small and micro enterprises and individual entrepreneurs. After securitization of small loan, Alibaba Small Loan can attain fund available for credit from capital market. In this way it will expand its business scale, and thus will provide better financial service to the real economy.
Small and micro enterprises, as the major clients of Alibaba Small Loan, will benefit from the development of this kind of products. In the meeting of the standing committee of State Council on June 19, it was explicitly pointed out that it was imperative to facilitate improving the weak link of credit for small and micro enterprises. In recent years, State Council has successively issued a series of supportive policies, elevating the development of small and micro enterprises in a strategic height, steering the financial support of financial institutions for small and micro enterprises, giving a full play to the irreplaceable role of small and micro enterprises in enhancing the job market and booming the economy growth, innovating science and technology and facilitating social harmony and stability.
Functioned as an important financial instrument for capital market to serve the real economy, asset securitization business provides a path for altering assets lack of liquidity into standardized financial products, therefore is of importance to activate the stock assets, and improve the liquidity of asset. Under the unified deploy of China Securities Regulatory Commission, SZSE has organized a special team for asset securitization since 2005, in order to advance asset securitization business. So far, it has successfully achieved the securitization of such assets as charge of express way, charge of sewage treatment, and revenue of electric power, providing support to the development of real economy and construction of infrastructure. After the successful earlier-stage trial, SZSE will endeavor to advance the asset securitization business to regular development, further improve the product structure and enrich the asset types. During the previous year, products such as charge of Nanjing Urban sewage treatment, ticket to the Happy Valley theme park, charge of Lancang River Power, etc., have been successively listed in SZSE, financing CNY6.25 billion for the enterprises.
Principal in charge of the related business from SZSE indicates that, SZSE will continue to push forward the asset securitization business steadily combining the need of real economy, continually carry out cultivation and demonstration of asset securitization business, and make efforts in the risk control and appropriateness management of innovative products. ‘Alibaba No.1-10 Special Asset Management Plan’ , being the first trial of small loan type of asset securitization, is both significant and risky. SZSE will further strengthen the continuing follow-up, risk evaluation and risk resolving mechanism of product, through increasing the prescribed minimum for the transfer of the advanced unit, implementing the investors’ appropriateness management, continually focusing on the transfer and repurchase of products, and refining the risk contingency pre-plan for major situation change.
