Research On The Financial Model Of Green Asset-backed Medium-term Notes

With the increasingly contradiction between economic growth and environmental protection,green economy has become an indispensable link for the sustainable development of the economy.Since 2016,China has continuously enriched and improved its advocacy and thoughts on the construction of ecological civilization;The National “Two Conferences” in 2019 emphasized again that it is necessary to adhere to ecological priorities and green development.In the development of green economy,green finance is obviously one of the most important impetus.Green industries have generated more funding needs,and the innovative financing tool in green financial products: green asset-backed medium-term notes has gradually been recognized by the market for its unique advantages.Green asset-backed medium-term notes in China were officially launched in 2017,and specific applications are still being explored.The article studies the green asset-backed medium-term notes with one case,and analyzes its specific financing applications,which is of great significance to the practice.Asset-backed medium-term notes can be divided into two types of financing operation modes: collateralized ABN and trust-type ABN.In 2016,trust-type ABN allowed the introduction of special transaction carriers and quickly occupied the market with its unique advantages.18 Longyuan green ABN is the first of the issued green ABN to adopt cycle purchase design as a trust-type ABN.The core of green asset-backed medium-term notes is to design and establish a rigorous and effective transaction structure.The key in the entire transaction structure lies in the selection of basic assets and the construction of asset pools,transaction operations and credit enhancement.After explaining the basic situation of Longyuan and the reasons for its actions,this article focuses on analyzing the transaction structure of the case,including its participants and relationships,basic assets,cycle purchase arrangements and credit enhancement.Pertinently,the article analyzes transaction structure through the following three aspects including preventing credit risk,liquidity risk,and capital mixing risk,which can provide a reference for similar businesses or assets in the green industry.The main research conclusions of the article are as follows: First,the application of green asset-backed medium-term notes to the green industry has the broad prospects for development.Green ABN has the advantages of fewer restrictions,green channels for approval and targeted precision financing,which are conducive to improving the efficiency of capital utilization,enriching financing channels and complying with the general trend of green finance development;Second,the design of the transaction structure of green ABN is flexible,and targeted choices can be made according to the characteristics of the underlying assets and financing purposes.2018 Longyuan green ABN’s transaction structure design particularly cycle purchase are good references for similar businesses;Third,green ABN market still needs to be standardized and developed.Finally,the article put forward relevant suggestions,including enhancing the internal and external credit enhancement of green ABN,rationally selecting financing transaction designs for green ABN,and promoting the establishment and improvement of green certification and information disclosure systems.