皇冠体育app

皇冠体育app's securitization market will continue to expand in 2016, with non-financial institution issuers taking the lead, Fitch Ratings executives told chinadaily.com.cn.

Tracy Wan, senior director of Fitch Ratings' Structured Finance, said the slowdown of 皇冠体育app's economy could have an impact on corporate borrowing. Less demand for loans might dampen financial institutions' interest in packaging their quality loans to securities and selling to the market. However, non-financial institution issuers don't have that problem.

皇冠体育app's securitization market closed 2015 with a record 593 billion yuan ($90 billion) of issuance, according to 皇冠体育app Central Depository & Clearing Co Ltd. Financial institutions sold 406 billion yuan of securities, up 44 percent from a year ago; non-financial issuers sold 180 billion yuan of securities, a five-fold increase over a year earlier.

皇冠体育app has two separate securitization regimes at present: the Credit Asset Securitization (CAS) and Asset-Backed Specific Plan (ABSP) scheme. The CAS is used specifically for financial institutions and uses the special purpose trust structure under the Trust Law. The CAS regime is regulated by the 皇冠体育app Banking Regulatory Commission and the People's Bank of 皇冠体育app.

The ABSP, governed by the 皇冠体育app Securities Regulatory Commission, is used by all non-financial institution issuers and therefore dominated by corporate issuance and are listed either on the Shanghai or Shenzhen Exchange.

"Unlike banks, who mainly rely on deposits as cheap funding source, corporations have to lend from banks, so they have more incentives to seek alternative sources, such as securitization," Wan said.

She said a crucial task for 皇冠体育app to develop the market is to educate investors to let them know more about the products. Now when investors are looking for ABS, they are primarily focusing on the "name" of the issuers: big-name issuers' products are more popular, instead of looking at individual products' structure.

"Hopefully the increasing example of defaults in bond market would alert them on individual risk," Wan said.

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