Research On The Capital Exit Mechanism Of International Financial Leasing

With the development of financial leasing has experienced three decades inChina, its contribution to the national economy increases year by year. But thereare still many problems, such as the low rate of the market infiltration, lessinternational, the current situations of the financing difficulties, the higher thecost of domestic capital and the low cost of foreign capital. We should think aboutthe general development of financial lease industry from the standpoint of theinternational financial leasing, not only focus on the domestic market, but moreabout the globe. With the rapid economic globalization, in response to thestrategy of “bringing in” and “sending out”, pushing the development ofinternational financial leasing allows no dely. Research on the capital exit ofinternational financial leasing can help us extend the foreign financing channel,solve the financing difficulties from our financial leasing companies, and meet thesmall businesses`international operations indirectly at the same time.Basing on the financial leasing theory, debt financing theory and themechanism design theory, we study the financing difficulties of financial leasingcompany from the perspective of the leased property exiting, and use the gametheory to design the general capital exit mechanism of international financialleasing. We give a clear definition of the capital exit mechanism of internationalfinancial leasing and build a mechanism design system before the design, includesexit aim, exit principles, exit participants, exit motives and exit channels. For thefollow-up study convenience, we make use of the common points of the exitchannels and normalize them to one. Normalize the intermediate service parts ofdifferent exit channels into one, like the intermediate costs and the participantsand make the preparations for the study of the capital exit mechanism ofinternational financial leasing. During the mechanism designing process, we start with the decision-makingby investors, analyze the benefit distribution between the investors and the leaser.Then we use the game theory to solve the Nash Equilibrium under the informationasymmetry between the investors and the leaser. And get the equilibriumsolutions while the leaser start the exit. If the leaser want to exit smoothly, theexiting should meet two conditions: the probability of the leasing asset being riskyshould less than the yield rate of interest margin and the exit cost should less thanthe exit income. after that, we put the conditions into the exit flow and enhancethe effectiveness of exit. Through the comparison between the exit mode offoreign and domestic, problems like exit channel is not smooth, laws andregulations is not complete and Chinese investors are not rational exist in China.We have proved the capital exit mechanism of international financial leasing canrun effectively, we find some international financial leasing cases from a financialleasing company and do empirical study to the mechanism. But not all cases meetthe two conditions, course our mode is not pefect, for the liquidity earnings cannot be accurately measure, saving qualified customers and the invest marketimperfection.At last, we go back to the different exit channels, it includes leasing assetsecuritization financing, leasing asset factoring financing, leasing asset trustfinancing and leasing asset foreign debt financing. Meanwhile we use theinternational experiences as reference and combine the development situation ofChina to make the capital exit mechanism of international financial leasing better.Such as the offshore asset securitization of leasing asset, the “true sale” of theasset by the leaser to the SPV provides “bankruptcy remoteness” insulating theleaser from the investor. Also we have the factoring financing of leasing assetmode with the stronger cooperation between a bank and a trust company and theforeign shareholders debt financing of overseas investment leasing companymode. Then we analyses the risks may face of different exit mode, and providesome suggestions for its control. Last but not least, through the comparisonamong the different exit ways, we find that different exit modes apply to different situations. Like the leasing asset factoring financing commonly applies to telecom,ships and aircraft and the leasing asset trust usually applies to medical equipment,engineering machinery. With these conclusions, the leaser can make a moreeffective decision while they want to do a exit.