Trust Beneficial Right-backed Security Case Of Stellar Cinema

The forms and application areas of asset securitization have continuously been innovated and expanded during its rapid development in China recent years.The scale of cinemas expanded rapidly as the booming of Chinese movie market in recent years,their demand for funds also booming.Then asset securitization became a popular innovative financing tool for cinemas.The program of trust beneficial right-backed security of Stellar Cinema is highly representative as the first case to use box office income as a basic asset.This essay analyzed several aspects of Stellar Cinema.First,the financing reasons are that asset securitization is easier to obtain with fewer restrictions and more in line with the actual financing needs of the company.Second,the liquidity of transaction structure is low while the security is high.The two-tiered SPV connected the various entities and helped to build up qualified basic assets,collected and dispersed cash flow,exerted economies of scale,and isolated uncertain risks.Third,the specialization of cash flow can be achieved through the use of technical means,cinemas' own management system and external supervision.The cash flow forecast was in good condition but there were cases of insufficient cash repayment in actual operation,fortunately they were supplemented by the guarantor in time.Forth,the total capital cost is made of the weighted average of the priority and subordinate securities capital costs.Finally,the internal and external risks also require our attention.Finally,during the implementation of asset securitization financing,the market performance of the enterprise has increased,the capital structure has been improved,and the profitability has improved significantly.This case reveals that other cinema can consider asset securitization as financing methods and the applicability of two-tiered SPV structure can't be ignored.Attention should be paid to improve the liquidity of asset securitization products and establish a more authoritative evaluation mechanism at the same time.