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I. Introduction
The asset securitization projects that have been successfully implemented in China include: COSCO Group's shipping income asset securitization, CIMC Group's accounts receivable asset securitization, Zhuhai Expressway's future income asset securitization and so on. Among them, the funds obtained by COSCO Group through asset securitization financing channels are about 550 million US dollars, Zhuhai Expressway is about 200 million US dollars, and CIMC Group is about 80 million US dollars. In these three asset securitization cases, foreign investment banks are the lead underwriters of securitization projects. At present, no domestic securities company has actually operated asset securitization projects, and the experience and knowledge accumulated by China securities companies in asset securitization are still in the primary stage, so it is necessary to learn from the experience of domestic investment banks. This paper is the author's new experience and understanding after communicating with the participants in the asset securitization project of COSCO Group.
Second, the basic introduction of COSCO Group
Cosco Group is a large enterprise group focusing on international shipping, integrating shipping agency, freight forwarding, air freight forwarding, dock warehousing, inland transportation, trade, industry, finance, insurance, real estate development, tourism, labor export, higher education and other businesses. It is one of the 56 large pilot enterprise groups identified by the state. Cosco Group has its own enterprises and outlets all over the country, among which ocean shipping enterprises in Guangzhou, Shanghai, Qingdao, Dalian and Tianjin have become regional companies with considerable strength. In addition, COSCO Group has its own agencies or companies in 38 countries and regions around the world, and its own agencies in 1 100 ports in more than 50 countries and regions around the world, forming a transnational business network with Beijing as the center and Hong Kong, the United States, Germany, Japan, Australia and Singapore as regional sub-centers.
Three. Introduction of financing methods of COSCO Group
1. Commercial paper
China Ocean Shipping (Group) Corporation has been continuously issuing commercial paper in the US capital market for a maximum period of 270 days. Distribution in the form of a syndicate, and the letter of credit is used as a guarantee for the issuance of commercial paper. On February 2, 2000, the signing ceremony of commercial paper extension of COSCO Group was successfully held in new york, which became the first financing project of COSCO Group after entering the new millennium. Representatives from Italian bank Siena, Bank of America, Citibank, First American Bank and Chase Bank, as well as Bank of China and China Bank of Communications attended the ceremony and signed relevant contracts.
2. Asset-backed securities
Under the impact of the Southeast Asian financial crisis, the financing function of commercial paper financing channels has been greatly weakened. COSCO Group issued $300 million in asset-backed securities at one time on 1997 with a term of 7 years. And issued $250 million in asset-backed securities in 1999 with a term of five years. Compared with commercial paper, asset-backed securities have a longer issuance period and do not need to be issued continuously, and their financing cost is lower than that issued through commercial paper.
Four. Introduction of Asset Securitization Project of COSCO Group
(1) The flow chart of asset issuance support for the subsidiary of COSCO Group is as follows.
Operating steps and instructions:
1. In the next few years, the subsidiaries of COSCO Group will provide customers with ocean transportation services in a continuous manner, and obtain a transportation income stream with stable income and good asset quality.
2. As an investment banking consultant of a subsidiary of COSCO Group, the investment bank (Chase Bank) analyzes the operation of a subsidiary of COSCO Group in previous years, takes the future freight income as the asset pool of asset-backed securities, and establishes corresponding agreements and texts.
This investment bank has set up an ad hoc trust in Cayman Islands. The ad hoc trust is an independent legal person. Because it is registered in the Cayman Islands, it enjoys tax-free treatment, but it is essentially a shell company.
4. A subsidiary of COSCO Group will sell the future transportation income sold to customers in the next few years to a special trust institution by agreement.
5. COSCO Group provides guarantee for the issuance of asset-backed securities by ad hoc trust institutions.
6. Ad hoc trust institutions issue asset-backed securities in the US capital market.
7. As the lead underwriter of issuing asset-backed securities, investment banks look for investors in the US capital market.
8. Local and State Administration of Foreign Exchange shall be responsible for coordinating and approving foreign exchange matters involved in the issuance of asset-backed securities.
9. Obtained approval from China financial regulatory agencies, including the People's Bank of China, the State Planning Commission and the China Securities Regulatory Commission.
(2) Cash flow statement of asset-backed securities issued by subsidiaries of COSCO Group:
1. Investors in asset-backed securities buy asset-backed securities in the US capital market and transfer the proceeds of asset-backed securities to the accounts of special trust institutions (that is, CACSO accounts of commercial banks).
2. The ad hoc trust institution will transfer the income from issuing asset-backed securities to the account of the subsidiary of CACSO Group through the account of the commercial bank.
3. A subsidiary of COSCO Group transferred the underwriting fees and attorney fees to the accounts of investment banks and law firms.
4. In the future, the customers of the subsidiaries of COSCO Group will pay the transportation fee to the CACSO account of the commercial bank according to the agreement and contract. The commercial bank account was established according to the agreement in the announcement, and the subsidiaries of COSCO Group cannot use the funds in the fund account at will.
5. Pay the principal and interest of the issued asset-backed securities to the asset-backed securities investors through the CACSO account of the commercial bank, and the payment method is as agreed in the announcement.
6. If there is still a surplus in the commercial bank account after paying the principal and interest to the asset-backed securities investors, the surplus will be paid to a subsidiary of COSCO Group.
7. The whole process of the custodian company's supervision of the commercial bank's CACSO account.
(C) the characteristics of asset-backed securities issued by COSCO Group
1. A subsidiary of COSCO Group issues asset-backed securities in the US capital market in the form of private placement. Usually, the financing channels of open capital market are: secondary market issuance, private placement to institutional investors and OTC system issuance. Taking COSCO Group as an example, due to the participation of institutional investors, the transaction cost of issuance is low.
2. The subsidiary of COSCO Group successfully issued asset-backed securities in the US capital market. One of the important reasons is that the subsidiaries of COSCO Group are global enterprises, and many customers are foreign-funded institutions, and the freight revenue obtained is settled in hard currency such as US dollars. There are few foreign exchange obstacles involved in the issuance process, which will not cause the problem of foreign exchange balance, and it is easier to pass the examination and approval of the State Administration of Foreign Exchange.
3. In the American capital market, obtaining a good credit rating is the difficulty and focus of issuing asset-backed securities. In this case, when designing the asset pool of asset-backed securities, the future freight income of large companies with reliable credit is selected as the asset pool; When designing the issuance scale, the form of excessive mortgage should be applied (that is, the assets included in the asset pool exceed the interest and principal of the issued asset-backed securities); The project is guaranteed by COSCO Group; In the process of issuance, we hired a well-known investment bank in the American capital market as an investment bank consultant and lead underwriter; Therefore, the asset-backed securities issued in this case are investment-grade securities above BBB.
4. In this context, an ad hoc trust was established in the Cayman Islands. As the Cayman Islands is a tax-free paradise, the business tax and stamp duty involved in issuing asset-backed securities are reduced, which greatly reduces the financing cost of this project. At the same time, due to the establishment of a special trust institution, the "real sale" process was adopted in the transaction structure of asset-backed securities issuance, which realized bankruptcy isolation and improved the credit rating of the issued securities.
5. Through asset-backed securities financing, the long-term sources of funds for the subsidiaries of COSCO Group are guaranteed, and the cost of funds paid is low.
6. The CACSO account set up by commercial banks in the asset-backed securities financing transaction structure is relatively independent and supervised by the custodian company.
7. In this case, as in general asset securitization cases, the asset-liability ratio can be greatly reduced compared with commercial paper and commercial loans.
8. With the participation of investment banks, the management level of the company can be greatly improved by making statistical analysis of the company's future freight revenue and formulating new management norms.
Verb (abbreviation of verb) conclusion
Through the field investigation of COSCO Group, this paper analyzes the operation process, steps and capital operation process of asset securitization project of COSCO Group, and summarizes the operation characteristics of the project, which provides useful experience for the design of asset securitization scheme.