Recently, Bus Operation Charge Usufruct Asset Backed Special Plan of Wuxi Communications Industry Group (hereinafter called as “Wuxi Bus Green ABS”), China’s first green ABS of non-listed company, was launched. This ABS has a scale of RMB 1.98 billion and a period of less than a decade (a decade included). IB, with a total investment of RMB 0.37 billion, made priority investment through wealth management capital that lasts for 0.65 year. The investment and raised fund is used for purchase of buses (mainly new energy buses and clean energy buses) and operation of bus facilities.
As the stakeholder of basic assets in this plan, Wuxi Communications Industry Group Co., Ltd. is the main body of transportation as well as investment, construction, operation and management of traffic infrastructure, with AAA corporate rating. It fulfills obligation of deficiency payment in this special plan.
Green ABS is designed for providing asset backed innovative products for environmental protection, sustainable development and climate change and other green projects. The plan received strong support from Shanghai Stock Exchange. It only cost about a month from accepting application materials to issuing a no action letter via green audit channel. Furthermore, the plan achieves internal credit enhancement by setting a transaction structure featuring priority / secondary payment order.
The successful investment in Wuxi Bus Green ABS marked another innovation in IB’s green wealth management.
As a pioneer of green finance in China, IB speeds up to push forward the Group's green financial strategy and its wealth management products become “greener”. In September 2016, IB issued its first “WLB-Green Finance” wealth management products with a valid term of 5 years. Purchase application and redemption will open every three months (an investment period). With capital mainly invested in green environmental protection projects and green bonds, these products have a reference annualized rate of return of 4.0% in the first investment period, and raised an initial fund of RMB 2.1 billion.
In 2006, IB was the first to open up green finance market in China. After a decade’s exploration and practice, it has formed a complete and multifarious green product service system covering green financing, green leasing, green trust, green fund, green investment green wealth management and green consumption. By the end of September, IB has offered green financing of nearly RMB 1 trillion in total and financing balance has reached RMB 451.9 billion.
The subscription of new bus green theme ABS demonstrated IB's confidence in the development of green economy and the prospect for green finance. In the future, IB will continue to promote the development of creating, designing and issuing green finance wealth management products, participate in more green environmental protection industry related projects, accelerate the compilation of green bond index, and boost the development of green industry and innovative and entrepreneurial enterprises in China.