A Case Study On The Failure Of Asset Securitization Of Income Right Of Water C Company

China is a poor country with per capita freshwater resources,and the development of the water industry is an important direction for improving the urban basic service industry and improving the people's livelihood.the development of water industry can not be separated from the support of funds.In 2012,the asset securitization market entered a restart phase,in response to the Government's call,the water industry,with the help of financial markets,issues asset securitization based on the right to water charges to obtain development funds.Even the C water company's revenue asset support program were suspended because it failed to meet the target amount raised within a specified time limit in July 2018.Based on the basic theory of asset securitization and the project as the starting point,this paper uses case study,literature research and comparative analysis to explore the reasons for the failure of asset securitization issuance of income rights of water C companies.Under its guidance,the project is proposed to improve the project,promote the project to reissue,and help other water companies to use asset securitization to achieve external financing.Firstly,it clarifies the background and significance of the topic,explains the research method and structure,and introduces the basic theory of asset securitization.And then from the water industry water income rights asset securitization status,water C company profile,project basic information to complete the case background.Based on the theory and case background,it is found that the failure causes can be summed up as follows: First,the basic assets are franchised,ownership is unstable.Second,the cash flow forecast of basic assets lacks objectivity and neglects the risk that cash flow is not expected.Third,the proportion of priority and sub-security stratification is improper,and the scale of sub-security is doubtful about the adequacy of credit support of priority securities.Fourth,the balance payer's arrangement is improper,its operating condition is difficult to guarantee its ability to carry out its duties;.Fifthly,the guarantor's choice is improper,the operating condition and the market position do not meet the guarantee requirements;sixthly,there are hidden dangers in risk isolation,and the risk of mixed misappropriation of funds under the time path of cash flow is high.Seventh is the lack of independence of credit rating," false high " problem is significant.Eighth is unreasonable pricing,risk and income do not match.Ninth is poor marketing,promotion by the intermediary market credit impact.Through the reasons of failure,we can see that the basic assets with clear ownership and stable cash flow are the premise of the successful issuance of asset securitization,risk isolation is an important support,credit rating independence and the effectiveness of the measures are the guarantee,and reasonable pricing and marketing are the foundation.In this regard,the following suggestions are made: The first is to set up specific bank deposit vouchers to strengthen the effect of risk isolation.Second,improve the asset-backed securities stratification,improve the priority securities credit support effect.The third is to optimize the balance payment commitment and guarantee,set up "the second difference payment promise person ",introduce the professional guarantee institution.Fourth,the introduction of "investor payment" and "double rating" model to improve the independence of credit rating.Fifthly,reference to credit debt and income rights asset-backed securities spreads,improve the accuracy of risk pricing.Sixth,improve the selection criteria of intermediary organizations,improve marketing effect.Seven is to develop sewage treatment business to ensure water quality safety,guarantee the stability of ownership of basic assets,and expand the industrial chain to improve profitability.Eighth,with the help of electronic systems,horizontal and vertical information disclosure,improve transparency.