On The Product Design Of Commercial Banks’ Green Credit Asset Securitization In China

The development of green industries and the green transformation of traditional industries are inseparable from the financial support,especially the loans granted to green projects by commercial banks.As an efficient financial instrument in the capital market,asset securitization improves the credit institutions of commercial banks and eases the pressure on liquidity.As China’s first successful issuance of green credit asset-backed securities products,XINYIN 2016-01 Green Credit ABS plays a good role for the promotion of assets securitization of green credit.Asset securitization of green credit can meet the requirements for commercial banks to transfer risks and improve the efficiency of capital use.Product design is a key factor in the successful issuance of green credit asset securitization.The in-depth study of the design of green credit asset securitization products can provide experience and inspiration for China to continue to deepen the development of green credit asset securitization.Based on the literature review of the related concepts of green credit and the related research on the securitization of green credit assets,the paper expounds that in the process of designing green credit asset securitization products,we should focus on the construction of basic assets,the choice of credit enhancement methods,and the cash flow.Distribution and third-party green certification,etc.Summarize the characteristics of the development of China’s green credit asset securitization and the characteristics of its product factors,and compare it with the US asset securitization product factors.Then analyze the main elements of green credit asset securitization product design,mainly from the transaction structure,green credit classification,credit enhancement and cash flow and income distribution mechanism,product pricing in a detailed analysis.Through analyzing the product elements of XINGYIN 2016-01 Green Credit ABS,we explored the situation of China’s green credit asset securitization product design,and summarized the characteristics and deficiencies of the product.Finally,through the collation of documents,the analysis of cases,and the comparison of the securitization of green credit assets between China and the United States,a case study was made and related suggestions were made.The main viewpoints of the thesis are as follow.First,the issuance scale of China’s green credit asset securitization is relatively small.China can try to issue green credit asset-backed securities in warehouse-style.Second,China has not yet established a green guarantee agency and implements the principle of voluntary green certification.It is recommended that China implement mandatory double green certification,and the government can establish a green risk compensation fund.Third,credit enhancement can reduce the issuance costs and increase the issuance efficiency and it is an important part of the product design of green credit asset securitization.Fourth,for there are few historical data on China’s green credit asset securitization and few assumptions for the static interest spread method,the static interest spread method is applicable to the pricing of China’s green credit asset securitization.The innovation of the thesis lies in the analysis of the model and characteristics of the securitization of green credit assets in the United States,and the difference from China’s green credit asset securitization and dissection of the differences in the characteristics of green credit asset securitization and other asset securitization products.The paper also makes some attempts to deconstruct the product design elements of green credit asset securitization.In addition,the paper uses the static interest spread method to analyze the pricing of cases and increase the empirical elements of the paper.However,the selected cases are single and limited in representation.The selected static spread pricing model has certain limitations.