Analysis On The Transaction Structure Of Non-Performing Asset Securitization In China’s Commercial Bank

While the scale of China’s commercial Banks continues to expand,the increasing nonperforming loan balance and non-performing loan ratio of commercial banks have been troubling the operation and development of commercial banks.The traditional methods to resolve the non-performing assets include cash collection,debt restructuring,package disposal,and write-off,etc.,which are time-consuming,costly and inefficient.Securitization,as a new type of disposal method with high volume and high efficiency,is still in the pilot stage in China.Because of the difference with the basic assets of ordinary credit asset securitization,the core of non-performing asset securitization is the design of transaction structure,such as how to make cash flow arrangement,whether to truly sell,how to conduct risk isolation,what are the credit enhancement measures and so on.This paper is mainly divided into four parts.First,by reading the domestic and foreign literature on non-performing assets securitization,this paper analyzes significance of nonperforming asset securitization and design of transaction structure.Second,this paper analyzes the relevant theory of non-performing asset securitization and its practical application in transaction structure design,introduces the development history of non-performing asset securitization business in China,and summarizes and analyzes the overall characteristics of transaction structure of non-performing asset backed securities separately initiated by all commercial banks up to now.Again,choose three cases to analysis,one is China’s first commercial bank non-performing asset securitization product promoted by Ningbo branch of Industrial and Commercial Bank of China,another one is China Merchants Bank’s "And the second phase of the 2016 non-performing asset-backed securities named Hecui".Analyze transaction structure of the two cases separately,point out the first case was not actually sale,its risk was not fully transferred,lack of independent and unified fund custody institutions,registration and management institutions and lack of effective investment market."Jianyuan 2008-1" borrowers are concentrated in several industries,securities liquidity is poor,the lack of recycling funds in investment arrangements and information disclosure is not sound."Hecui 2016-2" ’s shortcomings are underlying asset limit,discount rate is too low,subprime securities are illiquid,risk retention.Finally,through the analysis and research of this paper,the following conclusions are drawn.:The design of transaction structure is related to the issuance and payment success of NPLS.Now China’s transaction structure still needs to be further optimized,and relevant policies also need to be improved.And from a microcosmic perspective,draw inspirations according to the cases,about the underlying assets,securities stratification,service functions,external credit enhancement measures,risk retention form,investment of income,liquidity support institution.From a macro perspective,put forward the legal,tax,the range of investors,the ratings of policy recommendations.