Nod for asset projects seen to speed up
By Feng Jianmin |
May 31, 2013, Friday
|
Print Edition
Print Edition
CHINA may accelerate approval of asset securitization projects in the second half this year, the China affiliate of Moody's Investment Service said in Shanghai yesterday.
"There is no clear timetable but we think approval will speed up," said Wu Jin, vice president of China Chengxin International Credit Rating Co, adding that the projects are waiting to be approved for sale.
Wu said quality of the assets in this batch of projects is better than those sold in China before the 2008 global financial crisis.
Last year, China re-started asset securitization by allowing banks and companies to pool various types of debts such as loans and mortgages, and sell them as bonds to various investors. The practice was suspended between 2008 and 2012 due to the global financial crisis.
China last year allocated a 50 billion yuan (US$8.13 billion) quota to restart the securitization projects, and six projects worth 23 billion yuan have been approved for sale so far.
Selling asset securitization products can enhance liquidity for banks and companies and improve their asset quality. But one criticism is that the lack of transparency in these products caused huge losses for investors during the financial crisis.
"There is no clear timetable but we think approval will speed up," said Wu Jin, vice president of China Chengxin International Credit Rating Co, adding that the projects are waiting to be approved for sale.
Wu said quality of the assets in this batch of projects is better than those sold in China before the 2008 global financial crisis.
Last year, China re-started asset securitization by allowing banks and companies to pool various types of debts such as loans and mortgages, and sell them as bonds to various investors. The practice was suspended between 2008 and 2012 due to the global financial crisis.
China last year allocated a 50 billion yuan (US$8.13 billion) quota to restart the securitization projects, and six projects worth 23 billion yuan have been approved for sale so far.
Selling asset securitization products can enhance liquidity for banks and companies and improve their asset quality. But one criticism is that the lack of transparency in these products caused huge losses for investors during the financial crisis.
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