On Risk Prevention Of Asset-backed Notes Of Financial Leasing Companies

Since the introduction of financial leasing in China in the 1980 s,the number of financial leasing companies have been on the rise in these decades.The data of the National Financial Leasing Enterprise Management Information Service Platform shows that the number of financial leasing registered in China by the end of 2017 is 9 090,an increase of 1 954 from the end of last year,an increase of 27.4%.There are 276 domestically funded pilot enterprises registered,accounting for 3%,an increase of 72 over last year,an increase of 35.3%,and 8 745 registered foreign-invested enterprises,accounting for 97%,an increase of 1 862 over last year.The scale is large,with an increase of 27.1%.And there are 69 financial leasing companies.Although China's financial leasing industry has developed fast,it still has a certain distance compared with European and American.Because of the characteristics of financial leasing companies,they need to pay a lot of cash in the initial stage of business,and because of their scale,the amount of money that can be borrowed in banks is limited.Therefore,a very important factor restricting the development of China's financial leasing companies is financing.In the operation mode of financial leasing,the financial leasing company will have a stable cash flow,which is the cash flow emphasized in asset securitization.Therefore,the financial leasing company can adopt one of the methods of securitization of financial leasing credit assets.After designing the debt assets as the underlying assets as asset-backed instruments,on the one hand,the company's asset liquidity can be enhanced,and on the other hand,the funds obtained can be used to expand the business to promote the liquidity of the entire market.Asset securitization of financial leasing credit can help financial leasing companies solve some of the difficulties of financing.Asset-backed notes have many advantages,but the risks cannot be ignored.Therefore,when designing products,the company needs to pay attention to the risks that the products may bring to investors and reasonably prevent the risks involved.This paper takes the H asset-backed notes of the financial leasing company A as a case to study its risks and the preventive measures of Company A's possible risks to the product.In the analysis process,it is mainly through the study of the underlying assets of H asset-backed notes,the involved participants,the sponsoring institutions and other factors that may affect the revenue of the trust plan,and analyze the possible risk that may affects the benefits of the trust plan the release method of A company,and finally study the problems in the process of A company's response to risks and propose corresponding countermeasures.This article takes the H asset-backed notes as a case,and its release method and recommendations provide reference for other financial leasing companies that are preparing to make the financial leasing creditor ABN.This paper concludes that there are some risks in the products of China's financial leasing companies after securitizing their debts.These risks mainly come from the credit risk of the original equity and underlying assets,the risks of the participants in the transaction structure,the risks of the sponsors and other risks.Therefore,in the face of these risks,we should consider the selection and matching of the underlying assets,and pay attention to the credit risk of the lessee corresponding to the underlying assets,which can be analyzed using the “5C” analysis method.When selecting participants,we must also pay attention to the performance of their past responsibilities and select the participants who best meet their own requirements.The risks of originator mainly lie in financial risks,operational risks and internal management-related risks.This requires the sponsoring organization to remain vigilant in its daily operations,establish an information management system,and take appropriate measures in a timely manner.Other risks are mainly tax risks and force majeure risks.Enterprises need to pay attention to the adverse effects that such risks may have on the issuer.