Commercial Mortgage Backed Security Case Of Shekou

With the rapid development of the housing rental market,the long-term rental apartment industry of China has achieved explosive growth in recent years.Due to the high operating cost and large amount of capital,the long-term rental apartment enterprises choose the innovative financing method of asset-backed security(ABS)in the process of operation.In this paper,the ABS case about long rental of China Merchants Shekou Industrial Zone Holdings Co.,Ltd(CMSI)is the first case in China that takes rent income as basic assets and issues ABS products in the form of shelving issuance.The above case is representative and reference value in this paper.This paper analyzes the case of CMSI’s Long rental apartment from different aspects.In aspect of financing motivation,the ABS can revitalize existing assets,reduce liquidity risks,and meet the financing needs of long-term rental apartment enterprises operating in the asset-heavy mode.In aspect of financing advantages,compared with traditional bank financing channels,CMBS has fewer restrictions.Compared with ABS of asset-light mode,it has obvious advantages in project credit increase and operation effect.In terms of transaction structure,the liquidity is relatively low and the security is relatively guaranteed.The two-tier SPV can build qualified infrastructure assets effectively.In aspect of cash flow,through the standardized process design and the corresponding cash flow supervision mechanism,the specific cash flow of rental income can be realized.That is,the cash flow forecast is in good condition and the first allocation is sufficient to pay the investor’s principal and interest.Meanwhile,This paper analyzes and puts forward Suggestions from the aspects of basic assets,securities issuance and implementation risks about CMSI’s Long rental apartment.The case study in this paper provides a reference for other long-term rental apartment enterprises to implement ABS.Especially,the CMBS model has its unique advantages in ABS financing for asset-heavy and centralized long-lease apartment enterprises.Finally,this paper puts forward reasonable suggestions for the long rental apartment industry from the aspects of ABS mode selection,credit enhancement measures,shelving issuance,and unified evaluation standards.