Path And Pricing Analysis Of ADBC Credit Asset Securitization

Agricultural Development Bank of China (ADBC) is an important part of the financialsystem as China’s agricultural policy bank only. Quality of its credit assets has a decisive rolein the healthy operation of it. But the ADBC’s credit asset structure of current have manyproblems, such as capital adequacy ratio is low, non-performing assets ratio is too high, thefinancing channel is single and the intermediate business income is low, these problems haveseriously restricted the credit asset liquidity, safety and efficiency of the improved, makeADBC facing the great risk. Therefore, optimizing the structure of its credit assets caneffectively resolve the internal ADBC system risk, and improve the internationalcompetitiveness of China’s banking industry and even play a decisive role role in the entirefinancial industry.Asset securitization is one of the important ways to optimize credit structure. Butcompared with developed market economy and Asian emerging market economies, thedevelopment of asset securitization in China is far behind, especially for the securitization ofagricultural finance institutions is almost empty, basic status of the urgent requirements andfinancial reform and innovation of our country and agriculture is not consistent, can be saidthat the securitization of ADBC has not received due attention. After the sub-prime crisis, thecredit asset securitization to reopen and reflect the new features, such as the types of basicassets to expand further, after cleaning the compliance of local government financingPlatform Co loans, agricultural loans, loans to small and medium enterprises can beincorporated into the ADBC, with the implementation of the initial securitization conditions,but also provides a practical on the basis of reasonable for studying ADBC securitization.This paper takes Hunan Province branch as an example, conducts the research to therealization of the path and the pricing problem of ADBC credit assets securities. Firstlyexpounds the basic theory of asset securitization, and introduces the securitization of creditassets in the main, operation process and the development process in china. And then from thecurrent situation of ADBC assets and liabilities structure, analyses the necessity, feasibilityand advantage of securitization, and summarizes the ADBC implementation of securitization has internal and external conditions. Then on the ADBC in Hunan Province branch as anexample, discusses the suitable for Hunan branch asset pool, and designs the pricing structure,transaction corresponding. Finally, through the theoretical analysis of the ADBC credit assetssecuritization and practical operation process, summed up the securitization process problems,and puts forward policy suggestions for improvement.The article in the course of the study focus on the following points: first of all, throughthe analysis of the ADBC assets and liabilities business characteristics and policyenvironment, summarizes the agricultural release their own conditions and advantages ofimplementing the securitization.Secondly, according to the specific situation of securitizationof the implementation of ADBC, set the selected as restrictive conditions of basic assets, putsforward the idea of establishing a wholly owned subsidiary of ADBC SPV, proposed twoparty in the equity bond based on the embedded option and option to set up the insurancecontract designed for securitization products, and do simulation analysis for pricing. Finally,in view of the current financial environment and China’s asset securitization research status,can be improved from the legal and supervise system, market system, tax policy, so as toprovide a good external environment for the implementation of ADBC securitization. Thisresearch can provide some theoretical guidance, the securitization for the implementation ofADBC, hope ADBC can through asset securitization, to spread the risks of banks especially inthe long-term risk of credit funds, and further adjust the structure of assets and liabilities, soas to better shoulder the mission of supporting rural economic development.