Research On The Key Issues Concerning ABS Project Financing In China

Asset-Backed Securities is a kind of important innovation in the field of international finance in the recent years. With its perfect structure design. ABS enables the financial organizations like bank and enterprises to transfer their currently less flowing assets into securities which can be sold and circulated in the capital market, during which process the future stable cash-flow is expected by the way of separation and recombination of risks and return. During the process, the future project return serves as a support, the procedure and method of ABS transaction is used to issue securities for project financing. This practice is the process of project financing as well as that of ABS, hence, we name it ABS projects financing. This mode of financing shows distinguishing advantages, which deserves wide spread in our country to shake off the difficulties our current project financing is facing. Based on the analysis of the mode of financing concerning ABS, the thesis probes into several key issues in regard to ABS project financing. In the end, it summarizes the development of ABS in China and its future expectancy. The thesis is composed of five chapters.In the first place, the preface discusses on two parts: raise of the question and the overall introduction on the literature. It also briefs the method of research, its structural system and its new point.Chapter one: Project financing and ABS. This chapter gives the definitions of project financing and ABS, their inter-relationship as well as the features of ABS. It expounds the basic theory of ABS from three aspects: the body involving of ABS, which is the bases of researching on ABS project financing.Chapter two: the necessity and feasibility of project financing concerning ABS in China. Starting from the present channels of project financing in China, this chapter analyzes the difficulties during the process of project financing, with the advantage of ABS project financing and present condition in consideration, it is concluded that project financing concerning ABS is necessary as well as practical in China.Chapter three: Research on the key issues in ABS project financing in China. The thesis takes three key issues into deep analysis in regard to ABS project financing. The first one: As the media of originators and investors, Special Purpose Vehicle (SPV for short), is the core in the structure of securities transaction, therefore, the key to what mode to take in ABS is to take what pattern to set up SPV. In our present legal system, the thesis compares with the patterns of foreign SPV and expounds the pattern of setting up SPV, which may well match ABS project financing in China. Taking real and invented cases, the thesis analyzes on the varies modes of project financingconcerning ABS in China------the mode of setting up SPV overseas as well as settingup SPV at home (in which two modes are included, SPC & SPT) . In addition, it is proposed that the mode of project financing concerning ABS should be taken bystages. The second one: Credit enhancing is a technical measure to enhance the credit evaluation of asset securities. The thesis starts from the obstacles in credit enhancing in the process of project financing concerning ABS in China. From the past experiences of the case, it is concluded that the possible patterns of credit enhancing in the process of ABS project financing are the following: senior/subordinated structures, debt-payer fond, reserve fund account, and guarantee. The third: ABS project financing is a rather complicated and structural process in financing, which determines its high risks in practice. The thesis identifies and analyzes the possible risks, which may occur in project financing concerning ABS in China. Hence, it suggests specific measures to prevent and convert the risks.Chapter four: Summary and future expectation. Based on the overall summary of the thesis, this chapter discusses on the future expectation of project financing concerning ABS in China.