The Studies On SME Private Placement Bonds From The Perspective Of Chattel Mortgage

This paper makes studies on SME private placement bonds in China, which can ease financing problems. First, studying the development status of bonds from institutions, issue structure and credit enhancement, the results show that the bonds, except the flexible and convenient issuance, have many problems, including limited issuers, high risk, low transparency and low liquidity. Among all these problems, the greatest one is high risk. In order to reduce the risk, some bonds adopted credit-enhanced measures. Second, by constructing multiple regression models, the study shows that the credit-enhanced measures can reduce financing cost and improve liquidity. However, there are many weaknesses in third-party guarantee, including poor credit promotion, high cost and high risk. Additionally, SMEs lack real estate collaterals. So chattel mortgage is the most useful credit-enhanced measure. Third, the paper analyses the feasibility and necessity of chattel mortgage, and finds that the chattel mortgage gains supports from collaterals, law, technology and economic effects. But in the operational processes, value assessment of collaterals and perfection of policies should be concerned. What’s more, in order to standardize the operation, chattel mortgage business can adopt comprehensive value evaluation system, dynamic supervision system and margin system. Finally, with the above analysises, the paper offers advices for further improvement of SME private placement bond market. The innovation is that the paper provides a comprehensive study of SME private placement bonds and chattel mortgage, and put forward SME private placement bonds should adopt chattel mortgage business to promote development.