A Study On The Obstacles And Countermeasures Of The Highway Asset Securitization In China

Highway construction can reflect the level of traffic development of countries and regions. As the accelerator to promote the rapid development of the socio-economics, the level of highway development can also reflect the overall level of economic development of this country and the region. According to the12th Five-Year Plan issued by the Ministry of Communications, the highway need newly increase34,000km during the12th Five-Year Plan, which need to invest at least200billion funding annually. Highway network needs to be large-scale construction. Based on the experience of developed countries, the highway is generally concentrated constructed for20-30years. The highway large-scale construction in China started from2000and the next10years will continue to concentrate on building period. According to the CICC statistics, from the situation of fully funded of overall highway investment, the rate decreased from95.4%in2001to88.5%in2010. According to media reports, in2011the ratio further decreased to70%, funding constraint has become a bottleneck to highway construction. Rely on traditional financing methods (such as financial support, bank loans, traffic revenue, etc.), it is difficult to achieve the goal of building of the12th Five-Year Plan. Therefore, to develop diversified financing channels highway construction is a priority.The enterprise asset securitization is that non-financial entity enterprise separates the underlying asset which has bad mobility but can produce expected stable cash flow and then, the underlying asset is transferred to the SPV (special purpose agencies), the SPV designs the construction and set up a special client assets management plan to insulate the risks and benefits between the enterprise and underlying asset, and devise asset-backed securities based on underlying asset. The SPV entrusts Security Company to issue the benefit security in the stock market after the credit enhancement and rating. The SPV repay the purchase of the underlying assets of the funds based on the security income. Entity enterprise gets the fund and should periodic pay the principal and interest of the beneficiary certificates. From the pilot asset securitization instances in China, the asset securitization market is divided into two systems and separately using two structures: one is the People’s Bank and China Banking Regulatory Commission system, securitization of credit assets of the trust structure; the other is China Securities Regulatory Commission system, in the form of asset management plan. The content this article states belong to the latter, the special client asset management project is set up as the SPV.Enterprise asset securitization can effective use the idle funds and foreign investors in the capital market and low risk, low financing costs. Asset securitization can effectively compensate for the problem of shortage of funds highway construction projects in China and to promote the health and sustainability of highway in China and so on. Although the development of asset securitization in China has achieved a major breakthrough, but the enterprise asset securitization practice, especially in highway construction in China is still faced with the obstacles such as the relevant laws and imperfect, immature capital markets. If it is not a good solution to these difficulties and problems, the enterprise asset securitization practice will be still in hovering situations. This article intensively learns from mature countries experience, combined with the obstacles of asset securitization implemented in highway construction, and deeply analysis the legal system and the implementation of the environmental problems, explores environmental issues, and issues such as investment entities in the innovation of securitization issues, in order to facilitate the securitization of enterprise asset securitization in China in terms of highway construction, and thus extend to the real economy.This paper mainly uses the method of theoretical analysis and case studies to discuss. By theoretical analysis, this article summarizes the basic principles of asset securitization and the possibility of the implementation in the highway industry; through the analysis of the operation of the actual case, this article summarizes the barriers and countermeasures to the implementation of asset securitization in highway industry in China.This paper attempts to takes asset securitization into highway construction, focusing on the analysis of the regime and market obstacles encountered in the implementation process, and to propose appropriate strategies.This paper is divided into six chapters, roughly as follows:The first chapter is an introduction part which introduces the research background and domestic and foreign research status, and a brief description of the research content, innovation and the lack of point.The second chapter introduces the theory. Analyzes basic principles and features of the asset securitization, learns mature experience in asset securitization from developed countries, to lay a theoretical foundation for the introduction of asset securitization financing model for China’s highway construction.The third chapter is the analysis of the application of asset securitization financing model in highway construction. Mainly analyzing the feasibility of asset securitization financing in highway construction, and then summarizes a specific mode of operation.Chapter four summarizes the main obstacles in the possess of the implementation of asset securitization of highway construction in China, based on the theoretical analysis of the previous chapters and the implemental environment.The fifth chapter is targeted propose strategies for the main obstacles proposed by previous chapter.The sixth chapter is a summary of the full article.