Case Study On Risk Prevention Mechanism Of Securitization Of Usufruct Of CFID'PPP Project

The domain fund gap of infrastructure construction and the public service in our country is huge,so the local finance is hard to support.Besides,the government department runs the related project when the technology backward,the management experience lack and so on problem also increased the public product to provide the cost.In this case,the cooperation between the government and social capital such as capital,technology and management is a good way to solve the contradiction between supply and demand of our public goods and public services.The cooperation of government and social capital in this field is called PPP,and the government and social capital share the risk and benefit.Since 2014,the PPP project has grown rapidly with encouraging support.In practice,it is found that the huge upfront investment,the long payback period and the unclear exit path of PPP project deter some social capital.In order to solve these problems,asset securitization has come into the eyeshot of relevant people.The research shows that the combination of PPP and asset securitization revitalizes the stock assets,improves the liquidity and provides an exit route for social capital.As a result of various efforts,PPP asset securitization has been promoted completed,and 12 PPP asset securitization products have been successfully issued between March 2017 and the end of 2018.According to these 12 products,the present asset securitization of PPP assets in China is mostly asset securitization of usufruct,The instability of future cash flow of usufruct requires that more prudent risk control measures should be taken to reduce the risk of all parties in the securitization of PPP usufruct.In order to sum up the relevant experience,it is very necessary to deeply analyze the risk control cases of PPP usufruct securitization in China.Asset Securitization of Heating Charge Usufruct in PPP Project of China Fortune Land Development Co.Ltd's Guan Industrial Park(hereinafter referred to as "Securitization of Usufruct of CFLD's PPP ")is one of the first PPP asset securitization products in China,The PPP project it relies on is a high quality project that has been praised by the State Council and is typical of a case study.This paper uses the method of combining literature research and case study to summarize the existing research results by taking securitization of usufruct of CFLD's PPP as an example.Based on the macro-environment,this paper analyzes the policy environment,market environment and legal environment of securitization of usufruct of CFLD's PPP.Then the paper gives a detailed introduction to four aspects of securitization of usufruct of CFLD's PPP,such as transaction structure,credit enhancement means,basic assets and cash flow.On thisbasis,the main risks of securitization of usufruct of CFLD's PPP are summarized.Then apply the financial index method,non-financial index method and comparative analysis method flexibly,This paper studies the effects of risk control measures and measures such as excess cash flow coverage,priority/ sub-stratification,margin compensation,liquidity support,disclosure arrangement and so on in securitization of usufruct of CFLD's PPP.Finally,the conclusion of the research is summarized and the prospect of the research is put forward according to the shortcomings of this paper.Analysis on risk control of securitization of usufruct of CFLD's PPP;This paper holds that there are legal risks,due diligence risk,cash flow prediction risk,cash flow mixing risk and misappropriation risk,original interest person operating risk and credit enhancement institution credit risk in securitization of usufruct of CFLD's PPP.Among them,legal risk,due diligence risk and cash flow prediction risk of participating agencies are more likely to occur.In view of the above risks,the legal compliance of contract and process should be emphasized in the process of PPP usufruct.In the process of securitization,professional competence and good credit should be selected,and the supervision mechanism should be put into practice.External credit enhancement measures,such as margin replenishment commitments,liquidity support commitments and repurchase and sell-back guarantee commitments,can reduce the risk of default,and credit enhancement agencies should be selected as diversified as possible.The stable operation of the original owner and its parent company can reduce the default risk fundamentally.This paper has some innovation in the research method and research content.In the research method,this paper uses the single case analysis method to test the risk control of securitization of Usufruct of CFLD's PPP,and complements the relevant research of risk control of Usufruct Securitization of PPP.In this paper,we focus on the risk control of PPP usufruct securitization,This paper analyzes the particularity of securitization of PPP usufruct and the risk caused by it,and puts forward some risk control suggestions from the operation level of PPP usufruct securitization according to the conclusion of case analysis.