Research On The Financing Effectiveness And Financing Risk Management Of Huayu’s Ninth Phase

In recent years,China’s residents’ consumption demand for automobiles has been growing,and the development prospects of the consumer credit market are very promising.However,the development of China’s auto finance companies has been limited by the high cost of financing and the single source of financing.This paper attempts to explore the suitability of asset securitization as a new financing channel for the auto finance industry.It analyzes the effectiveness of the financing with a case study of the asset securitization financing of Volkswagen Finance,and analyzes the risks and problems of the financing and makes corresponding recommendations.At the same time,the paper summarizes the company’s experience with asset securitization financing and analyzes the value of the lessons learned for other companies.In this case,Volkswagen Finance Corporation issued a 5.97 billion yuan of asset securitization product called Huayu’s ninth phase auto mortgage-backed securities.Analysis of product design and cash flow revealed that: in terms of product design,the main parties involved in this transaction were experienced,the process design was reasonable,and the quality and continuity of the pooled funds were good,and the credit enhancement was mainly carried out by means of internal enhancement.In terms of cash flow,the product has strong cash flow support and low credit risk.Analysis of the relevant data reveals that the financing has the financing effect of broadening financing channels,reducing financing costs,and realizing accounts receivable in advance.The analysis of the risks of this financing reveals that its credit risk and operational risk are not very high,but it still needs further improvement.In addition,there is some early repayment risk and liquidity risk.After analyzing the causes of the identified problems,this paper makes recommendations for refinement and improvement at both company and national levels.At the company level,improvements can be made in several ways,such as strictly controlling the quality of the underlying asset pool,appropriately increasing the proportion of subordinated securities,subdividing the layers of asset-backed securities,and setting up coupon purchase protection clauses.At the national level,the laws and regulations of the asset securitization regulatory system should be improved and unified as soon as possible,and the liquidity of the secondary market should be enhanced.Finally,by summarizing the experience of Huayu’s ninth phase asset securitization financing,this paper argues that the red-black pool conversion mechanism,credit enhancement approach and non-fully sequential payment method it uses are of relevance to other businesses.