Research On The Model Of Asset Backed Securitization In PPP Projects Of Water Industry

Along with the rapid development of China’s national economy and the acceleration of urbanization,the development and construction of infrastructure has also achieved great results,but it is still difficult to meet the growing practical needs of the people and become a"bottleneck" that constrains the rapid development of the social economy.The water industry is one of the infrastructure construction industries related to the national economy and the people’s livelihood,and is undergoing a transformation of industrialization and marketization At present,the project construction and infrastructure maintenance funds have a huge gap and insufficient investment,which seriously restricts the development of the water industry.The application of PPP mode to China’s water industry is an inevitable requirement for the rapid development of China’s social economy.However,PPP financing also faces problems such as limited financing capacity and insufficient activity of project stock assets.The introduction of the asset securitization model can well solve some of the problems faced by the PPP projects in the water industry.This paper first introduces the implementation status of PPP mode in China’s water industry,and analyzes the feasibility of its asset securitization.Secondly,it designs a set of processes and models for asset securitization of PPP projects in the water industry,and focuses on its asset pricing and ways to increase credit.Thirdly,taking the asset securitization of the PPP demonstration project"Xuzhou Luoma Lake PPP Project"in the water industry as an example,the specific application of Monte Carlo simulation pricing method is introduced.Finally,based on the above analysis and case introduction,it draws conclusions and inspirations,and provides policy recommendations for the implementation and promotion of asset securitization of PPP projects in China’s water industry.This paper believes that the core of asset securitization in the PPP project of the water industry is to achieve the isolation of risks.The establishment of SPV can effectively transfer risks.In the process of asset securitization,the choice of product pricing benchmarks and credit enhancement methods is particularly important.The Monte Carlo simulation method is a method of yield simulation based on the future cash flow of the project itself,which is more suitable for PPP projects with stable cash flow.In the design of product credit enhancement,it is an effective means of credit enhancement to provide over-guarantee and securities to be issued at different levels.However,the asset securitization of the water industry is also faced with the lack of legal constraints,unreasonable product design,and a single distribution method.Therefore,suggestions for strengthening the top-level design and broadening the distribution channels are proposed.