Case Study On Asset Securitization Of The Beijing Capital Co., Ltd PPP Project

The development of urbanization requires that the efficiency of urban sewage treatment infrastructure should be rapidly improved.The treatment of urban sewage requires large-scale and complex design of sewage treatment facilities,which will cause huge capital demand in the construction of infrastructure in the sewage treatment field.However,the government's fiscal revenue does not cover such a huge demand for funds,forcing local governments to raise funds through the issuance of local bonds,and the government faces serious debt risks.To alleviate the severe situation,the central government decided to learn from the PPP model of cooperation between foreign governments and social capital.However,due to the inadequacy of the domestic system and the limitations of the PPP model itself,its ability to attract social capital is insufficient,and the PPP model is facing difficulties in its development in China.Subsequently,the financing method of asset securitization was introduced into the PPP project,which innovatively solved the problem of financing difficulties in PPP projects.In March 2017,the successful issuance of the first batch of PPP asset securitization projects marked the opening of the PPP securities assetization process in China.This paper selects the case study of the Beijing Capital Co.,Ltd PPP asset securit ization project of the first batch of PPP asset securitization projects.Firstly,the status quo of PPP asset securitization in 2017 is briefly introduced,and the relevant element s and processes of the PPP asset securitization project from the selection of basic asse ts to the issuance period of securitized products are described.Using case analysis met hod to analyze the PPP asset securitization project of the Beijing Capital Co.,Ltd fro m the financing reasons,it is clear that the creation of the securitization product by t he Beijing Capital Co.,Ltd aims to broaden its financing channels;Through the analy sis of the underlying assets and credit enhancement measures,it is found to be insuffi cient in many aspects,mainly because the basic assets in the PPP asset securitization project have not yet achieved bankruptcy isolation,the underlying assets cannot be rea lized,and the credit enhancement measures rely too much on the credit enhancement.The main and original rights holders' self-sustained subordinated securities result in lo wer financing effects and opaque credit rating system.Through the case analysis,the r elated proposals for improving the development of PPP asset securitization projects are proposed for the PPP Asset Securitization Project of the Beijing Capital Co.,Ltd.Ma inly PPP asset securitization projects should explore the way out of bankruptcy isolation of China's basic assets through the reference to the foreign whole business securitiza tion model,actively realize the “real sale” of basic assets,enrich the main body of cr edit enhancement,reduce the proportion of subordinate securities self-sustaining and I mprove the rating system and so on.basic assets in China by introducing the overall business securitization mode of foreig n countries,actively realizing the "real sale" of basic assets,enriching the main body of credit enhancement,reducing the self-sustaining ratio of secondary securities,and i mproving the rating system,etc.