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CDB sells ABS in line with plan to grow market
Print Edition
China Development Bank, one of the three Chinese policy banks, sold 8 billion yuan (US$1.3 billion) of asset-backed securities in line with the government’s plans to further expand the mainland’s asset securitization market.
The capital is part of the total amount of 20 billion yuan in securities backed by CDB’s loans to the state railway operator, according to Xinhua news agency. The 8 billion will be issued in three batches, it said.
“Future stable cash flows of the railway operators are the primary guarantee for the asset securitization financing,” said Industrial Securities.
“Additionally the government provides ‘implicit guarantees’ of the financing for public infrastructure projects, which raise the credit rating for the assets.”
The first batch issued by CDB in the Shanghai-based interbank market marked the latest move by the Chinese government to expand its ABS pilot program which was launched in 2005.
CDB, which was the first lender to issue ABS in China in 2005, raised 10.2 billion yuan last year out of a total market quota of 50 billion yuan.
China resumed the program last year and said in August it would be aggressively expanded. Market watchers expect the new quota to rise to 300 to 400 billion yuan in the future.
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