Research On The Application Of Green Asset-backed Medium-term Notes

With the increasingly serious problems of resources and environment,taking the green development path plays a decisive role in the transformation of China’s economy.In March 2016,“Building a Green Financial System and Cultivating Green Bonds” was written into China’s “13th Five-Year Plan”.In August 2016,the seven ministries and commissions jointly issued the “Guiding Opinions on Building a Green Financial System”,pointing out that it is necessary to promote and encourage social capital to invest in green industries to prevent investment in polluting projects.In September 2016,the G20 Summit put green finance on the issue for the first time.2016 is China’s first year of green finance,and a variety of green financial innovation products have emerged.Green industry development needs funds urgently.Green asset-backed medium-term notes,as an innovative financing tool,have only been two years since its establishment,so scholars have little research on it.This paper analyzes the issuance motivation and pricing of green asset-backed medium-term notes and aims to explore its practical application,which has important practical significance.The paper first expounds the meaning and development status of green assetbacked medium-term notes and analyzes the feasibility of its application in the leasing industry.Subsequently,an overview of the case “17 Ronghe Green ABN” is introduced,including product release information,transaction structure,basic asset pool and credit enhancement measures.Next,using the preferred stock and common stock capital cost model to calculate the issuance cost of the product.This paper focuses on the pricing analysis of green asset-backed medium-term notes.Through the static cash flow discounting method,static spread method and Monte Carlo simulation method,the measurement process is calculated by EVIEWS and MATLAB.The pricing results under these methods are analyzed and compared.The main conclusions of the paper are as follows: First,green asset-backed medium-term notes have certain advantages in corporate financing,which can revitalize existing assets,improve the liquidity of company assets,reduce financing costs,and achieve multi-channel financing.Second,the pricing of green asset-backed medium-term notes is suitable for the Monte Carlo simulation method.The method is based on the CIR interest rate model,the prepayment rate model and the default rate model.The calculated result is closest to the actual issuance scale of the product.Third,the market of green asset-backed medium-term notes still needs to be standardized.Through the study of this case,the paper finally puts forward relevant suggestions,including improving the pricing model of green asset-backed medium-term notes,encouraging enterprises to finance through green financing,formulating preferential policies for green asset securitization,strengthening the construction of information disclosure system and improving the professional competence of green third-party certification bodies.The possible innovations of this paper are: First,the research object is relatively new and the case representation is strong.Second,the multiple models and methods are used to quantitatively measure the distribution cost and pricing,thus the results are clear.The shortcomings of this paper are lack of sufficient case information and research data and the pricing methods have certain limitations.