A Study Of Asset-backed Securitization For Tourism Enterprises

The tourism industry plays an increasingly important role in China’seconomic development. Traditional financing methods can hardly meet thedemand of the tourism industry, especially for companies operating naturalparks for tourists. Expand financing tools can effectively help the tourismindustry in this regard. Asset backed securities now gain greater popularity inthe capital market with the improvement of regulations and bring moreopportunities for the tourism industry.In this thesis, I first introduce the basic principles of asset backedsecuritization and analyze the positive effects it brings to an enterprise,including expanding new sets of financing tools, improving the debt to equityratio, raising asset liquidity, reducing financial costs and burnishing thecompany’s image of innovation. Moreover, I compare asset backedsecuritization with other traditional financing methods and analyze thefeasibility of the securitization for the tourism industry.In this thesis I build a framework for evaluating the asset backedsecurities based on the existing securities and analyze the key components ofthese securities. Then, I design an asset backed security for the EmeiMountain enterprise. I give a range of yields for different tranches based onsimilar fixed income securities in the market and analyze risk managementissues of the asset backed security. I also draw some implications from mystudy for the development of ABS for the tourism industry in China.