Overview
Credit Asset Securitization is a process where bank credit assets with poor liquidity and predictable income are sold in the form of securities in the capital market to generate liquidity. There are two types of credit asset securitization in China. The first type is securitization of banks' credit assets and asset management companies' non-performing assets, subject to the approval and supervision by the China Banking Regulatory Commission (CBRC); these products are mainly traded in the inter-bank bond market. The second type is the business asset securitization carried out by securities companies, and mainly traded in the bulk trading system of stock exchanges in Shanghai and Shenzhen.
Features
1. Credit asset transfer
Financial institutions licensed for lending ("transferors") transfer credit assets they lawfully own, in part or in whole, to one or more financial institutions ("transferees") at agreed prices and for an agreed term. It mainly includes the following:
• Credit asset sell-out: To sell a package of credit assets in a single transaction to other financial institutions.
• Credit asset buy-out: To buy a package of high-quality credit assets of other financial institutions in a single transaction in accordance with the internal credit policy.
2. Investment products combining credit assets and corporate wealth management
Design corporate wealth management products with flexible maturities, based on proprietary or purchased credit assets, in order to provide customers with innovative investment products.
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