CDB Issued Railway Credit-Assets-Backed Security Phase One
OREANDA-NEWS. December 03, 2013. In order to optimize the allocation of financial resources, liquidize remnant assets, and better support the development of real economy, CDB today issued a phase one special credit-assets-backed security for Kaiyuan Railway at interbank bond market in 2013, with a total value of eight billion.
This is the first security product issued following the decision made by the State Council in August 2013 to further expand the pilot project of credit assets securitization, which marks a useful exploration by banking financial institutions to support the reform in investment and financing system in the railway sector.
It is reported that the sum of the railway credit-assets-backed security totals as RMB 20 billion which will be issued in three phases. For the RMB 8 billion of the first phase, CDB will act as the initiator, and CITIC Trust Co. , Ltd the issuer. The asset pool of this credit asset securitized product is made up of loans raised by China Railway Corporation. As the first securitized product issued in China for a specific industry's single borrower, the subscription intention of the investors are very high. The credit released by this issuance will be utilized to support construction projects in major areas such as railway construction, shantytowns renovation, contributing to the cause of "stabilizing growth, adjusting the structure and benefiting the livelihood".
Industry experts has pointed out that credit assets securitization can be regarded as the specific measures taken to implement finance-driven economic structure adjustment and transformation, and reform measures to develop the multilayer capital market. CDB has long been an innovative force in China's financial market, as well as a pioneer in terms of securitization. The innovative issuance of securitized product in railway is another attempt to effectively liquidize the remnant railway credit assets and widen the market exit for railway credit assets. The endeavor has explored a new path for China's reform in railway investment and financing system, marking a significant step forward in this area.
CDB is the leader in credit-assets-backed security issuance in terms of experience, phase number and scale. In 2005, CDB successfully issued the first Kaiyuan credit-assets-backed security, followed by two other similar products that becoming a pioneer in the industry. In 2012, following four years of silence in China's credit assets securitization market, CDB issued successfully a credit-assets-backed security valued at RMB10.166 billion, the largest credit asset securitized product on record in China. At present, the three products issued before 2008 by CDB had all been redeemed, whose good performance featuring "zero default record and error-free management" has been widely recognized by the industry market.