Case Study On Green Medium-Term Notes Financing In Wuhan Subway

In recent years,China’s urban rail transit has developed rapidly.In the development process,there are also many constraints,one of which is the capital constraint.However,the development of urban rail transit has responded to the call of national green development and should be supported and encouraged.With the rise and rapid development of green bonds,it is natural to carry out green debt financing in the construction of urban rail transit.Since 2016,Wuhan Metro has innovatively launched the financing method of green medium-term notes,which integrates the long-term capital needed for construction with a lower financing cost.This new financing method can be said to be an important supplement to the indirect financing method of bank loans,which also provides a reference for other cities to build subways for financing.This paper summarizes the development status of green medium-term notes in China.Based on the demand for capital in the development of Metro industry,it is pointed out that it is necessary to issue green bonds financing in the development of urban rail transit.Through in-depth comparative analysis,it is concluded that green medium-term notes financing in metro industry is more appropriate and optimal than green corporate bonds,green enterprise bonds and green asset-backed securities.Through the analysis of the classical cases of green medium-term notes financing issued by Wuhan Metro,the motives of Wuhan Metro green medium-term notes issued,product design characteristics,rationality of pricing,comparative advantage of financing cost,social effect,existing problems and risks,experience of company management and suggestions for existing problems are further clarified.In conclusion,the development of urban rail transit needs to develop new financing tools on the premise of risk prevention.Wuhan Metro issuing green medium-term notes,adopts the form of "bond-loan-fund combination" in product features,strictly manages and uses the raised funds,maintains prudent attitude to prevent risks,effectively reduces financing costs,and integrates long-term usable funds at a lower cost.It is believed that the issuance of green medium-term notes will better promote the development of urban rail transit and other public welfare projects in the future.