The first Public-Private-Partnership (PPP) asset securitization project under the PPP asset securitization framework of the National Development and Reform Commission (NDRC) and the China Securities Regulatory Commission (CSRC) will soon be implemented, and it will involve environment protection and logistics industrial park. An anonymous person being close with the regulatory authorities told the Securities Daily.
Against the backdrop of neutral and tight liquidity, industry insiders held that 2017 might see booming development of asset securitization. PPP asset securitization projects that are in line with policy guidance will be well liked. In addition, asset securitization projects in the real estate area will also see huge potential.
The NDRC and CSRC jointly issued the notice about advancing asset securitization of PPP projects in traditional infrastructure area in December 2016, officially initiating the asset securitization of PPP projects. As a result, multiple PPP projects are submitted intensively in recent few months. The Securities Daily learnt that the first PPP asset securitization project under the PPP asset securitization framework of the NDRC and CSRC might be implemented recently. The aforesaid person disclosed that the project involves environmental protection and logistics industrial park.
On the “2017 Lujiazui Asset Securitization Forum”, many industry insiders believed that the most important significance of PPP asset securitization lies in that it connects PPP projects with the capital market, vitalizes capital invested in PPP projects, effectively improves asset turnover rate, creates a new exit model, accelerates the withdrawal of investment cash flows, realizes profit in advance, decreases asset-liability ratio and gains interest margin in the capital market.
Besides PPP asset securitization, real estate investment trusts (REITs) might be another product favored by the market in 2017. Hong Lei, head of the Asset Management Association of China, proposed on the forum to strive to develop REITs and advance the securitization process of public real estate. Hong also proposed four measures to tackle the challenges faced by the development of REITs now. Namely, advancing the design of the basic system of REITs under the framework of the Law on Funds for Investment in Securities; accelerating the construction of the listing rules for asset securitization as well as the supervision and self-discipline system for REITs; actively advancing the implementation of unified tax system in the capital market and defining relevant tax policies for REITs; advancing the investment of pension funds in publicly-offered REITs and improving the structure of asset management.
Translated by Jennifer Lu
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