Research On Assets Securitization Financing Model Of Urban Rail Transit

With the development of the urbanization, China achieves sustained and rapid economic development. However, it also brings other problems like urban traffic jam and pollution. Urban rail transit has many features such as high speed, large capacity, high safety and environmental friendly. In recent years China has focused on the development of urban rail transit as a way of public transport. Social capital has little desire to invest in urban rail transit because of the long period of profit return. At present, in our country we get money for urban rail transit construction by government finance and bank loans as its major part, so the finance pressure is tremendous on the government. To develop urban rail transit we will face urgent problems that finding ways to enlarge financing channels and reduce financing costs. Firstly, with reference to related literature both in China and abroad, we reviewed the evolution of the theory of asset securitization, and searched for the theoretical basis of asset securitization financing model of urban rail transit, from the aspects of theory, affect, practical instructions and so on. Secondly, we analyzed the development, advantages, economic characteristics and financing characteristics of urban rail transit. Then researched and summed up the construction practice and the financing practice in London, Tokyo, Singapore, Hong Kong and Beijing. Concluded that the three main ways to develop urban rail transit are to use government investment, debt financing and mixed financing. We put forward that our country should make government investment as the leading, and take a diversification strategy with development. Again, took urban rail transit of Xi’an for an example, we considered with the characteristics of asset securitization and concluded that the asset securitization financing model of urban rail transit is necessary and feasible. We analyzed the advantages of enlarging financing channels, reducing financing costs, activating deposit assets and optimizing financial statements of a company. The practice of asset securitization had a good market environment and legal basis. We also had similar cases for our references. Finally, we put forward a financing scheme of the asset securitization based on urban rail transit of Xi’an. We measured the cash-flow of ticket revenue by calculating with linear growth model, the DCF model, the SS model and the OAS model. And we chose the underlying asset of the scheme. Then we analyzed the product model, the establishment of SPV, the credit enhancement, the amount and the maturity, the risks and the countermeasures of the asset securitization, and gave suggestions for chosen. Besides, we estimated the costs of the scheme, compared with the costs of bank loans. We also brought policy advices as well.Through the research we came to the conclusion that we can use asset securitization for urban rail transit financing under the condition that the sponsor has a high credit rating. As scheme of the asset securitization is practical, and there have advantages of cost and payment convenience. Asset securitization can ease the financial problems of urban rail transit development effectively.