Research On The Method Of Credit Rating Of Asset Securitization In China

2015 was known as the outbreak year of the asset securitization, in which year the issuance exceeded the total issuance of previous years. The underlying assets of asset backed securities are various, and the structures are complex. Meanwhile, many parties are involved. The asymmetric information problem is very serious, so the credit rating issued by a rating agency is a good reference to the market. To some extent, it alleviates the problem. Asset securitization products were born in the United States in the late 60’s of last century, and it developed fast. Nowadays it becomes more and more important because of the existence of large amount of deposit assets. Domestic asset securitization began in 2005, and stagnated after the U.S. sub loan crisis. In 2012, it restarted, and in 2015 started explosive growth. Domestic asset securitization began late and just developed for a short time. The credit rating methods are mainly learnt from the international rating agencies. With both qualitative analysis and quantitative analysis, domestic rating agencies analyze the asset-backed securities through the underlying assets, the structure, the cash flow and the important participants. The model used for credit risk assessment is the core of asset securitization credit rating. Among numerous international rating methods, Monte Carlo simulation is most popular. At home, rating agencies choose models according to the underlying assets, and Monte Carlo simulation is also the most popular. But in most situations, domestic rating agencies just copy foreign agencies’ methods, instead of using a unique system adapted to domestic conditions. In this regard, more research of rating methods is needed. This paper started from the basic theories of asset securitization and credit rating, and expounded the credit rating methods used for asset securitization at home and abroad. Furthermore, the paper showd the main process and method of asset securitization rating of domestic enterprises with a case. The innovation of this paper is demonstrating the role of rating agencies as a product designer, except of showing the main concerns of the domestic enterprise asset securitization rating. The deficiency is it still not put forward suitable methods for national asset securitization rating.