On January 24, 2014, the “Xing Yuan First Issue of Credit Asset-backed Securities” (ABS), for which Industrial Bank (IB) serves as the promoter, in the national inter-bank bond market witnessed a successful invitation for bid. The total issue reached RMB 5,184.185 million, and the total subscription level hit RMB 7,814.9 million, 1.59 times as great as the bid amount.
In the business development of credit assets securitization, this issue of securities took the lead in the following three aspects: First, after it was decided in the executive meeting of the State Council held on August 28, 2013 to further extend the pilot areas for credit assets securitization, it is the first approved assets securitization project of a joint-stock commercial bank; second, it is the first assets securitization project adopting the latest risk self-retention rules after the implementation of the “new securitization polices” (Document [2013] No. 21) of the People's Bank of China (PBC) and China Banking Regulatory Commission (CBRC); third, it is the issue of assets securitization project with the largest bid scale for which a joint-stock commercial serves as the promoter after 2012.
A public invitation for the issue of securities of different priorities was conducted targeting at institutional investors in the inter-bank bond market. Specifically, the securities of the priority level A1-1 have a scale of RMB 1.5 billion, with a bid-winning interest rate of 6.4% (fixed); the securities of the priority level A1-2 have a scale of RMB 700 million, with a bid-winning interest rate of 6.5% (fixed); the securities of the priority level A2 have a scale of RMB 2.048 billion, with a bid-winning interest spread of 3.5% (the floating rate based on the fixed rate for one-year fixed deposit, with the current coupon rate being 6.5%); and the securities of the priority level B have a scale of RMB 500 million, with a bid-winning interest spread of 4.5% (the floating rate based on the fixed rate for one-year fixed deposit, with the current coupon rate being 7.5%). Meanwhile, the securities of the secondary level with a scale of RMB 436.185 million also fulfilled the tailored invitation for bid.
Dai Xiaoyuan, General Manager of in the Investment Banking Department of IB Head Office, indicates that, following the spirit of “using the incremental in a desired manner, and revitalizing the stock”, IB will revitalize its credit resources in stock through this credit assets securitization and use them mainly in the areas encouraged by the state including environment finance and financial services to small- and mini-sized businesses, etc. She indicates that IB will, in the light of the arrangement of the PBC and the CBRC, further extend its business of assets securitization in an orderly manner, promote the sustained improvement of banking asset-liability structure, and meanwhile make efforts to improve China's multi-level financial market system.