Application Research On Trade Receivables Securitization In China

Assets securities came into being in American in the end of1970’s,and spread to the rest ofthe world in1990’s, and it is now one of the three most popular financing tools,and the other twoare debt financing and equity financing. And china are participating in the asset securitizationdevelopment with initial success. Research and discussion aiming for the situation has beencarried out.But the internal scholars paid more attention to estate gage loan backed securities andrarely talk about accounts receivable securitization. In addition, there are relevant regime andenvironment barriers in our country that hampers the development of accounts receivablesecuritization.The company can reduce the financing cost by using accounts receivable securitization:firstly, the company influx the accounts receivable for securities to the bank. And then theseaccount receivable are made up of an asset pool by the bank. After that.the bank transferredaccounts receivable to SPV by the form of possession transfer. Finally, SPV will be responsible forissuing the accounts receivable-backed securities to investor. The cash flow caused by accountsreceivable repayment will be paid for principal and interest of securities. Securities issued by themodal are based on the foreseeable cash flow of accounts receivable in the future.The paper aims to find modes for the development of accounts receivable securities in ourcountry referring to the comparison of practice in other countries, theory asset securitization andthe real environment in our country. In addition, according to the analysis of the cases in ourcountry, the paper aims to bring paradigmatic effects to the development of account receivablesecuritization in china. Otherwise, TCL GROUP as the case, this article analyzes the operation andeffect of accounts receivable securitization.