Research On Asset Securitization Of Auto Finance Companies

With the gradual expansion of auto credit business in China,more and more people has no longer choose commercial banks as their first choice for car loans,but tend to auto finance companies.As an important participant in the auto finance market,bank loans have always been the main source of funds for companies for a long time,and the difficulties of financing have greatly restricted the development of the whole industry.Auto finance company holds a large number of car loans from users,these assets can provide continuous capital flow for the enterprises in the future,which can be used to issue asset-backed securities.As an external financing method,asset securitization can effectively alleviate the current financing difficulties of the company without increasing the debt scale.It has been favored by auto financing companies and gradually developed into one of the main financing methods.In recent years,China has begun to pay attention to the application of asset securitization in auto finance companies,and has promulgated a number of laws and regulations to promote the healthy development of the whole industry.This paper analyzed the case of the first phase of Shengshi Diyao in 2020.Firstly,I introduced the relevant concepts and theoretical basis of auto loan asset securitization,and then analyzed the issuing background,basic situation and issuing motivation of the current product in detail.Then through analyzing the quality of asset pool,credit enhancement measures and the risks of the sceuritization,I found that the asset pool of this product is in a good condition,and the application of various internal credit enhancement methods and risk mitigation measures can also ensure the returns of the senior investors.Then compared with the Hua Yu which has rice experience in asset securitization,I found that the first phase of Shengshi Diyao in 2020 exists the problems of relative concentration in assets,the transaction structure is too traditional and did not use the rating agencies from abroad.Finally,through the above analysis,combined with the problems existing in this product,I got the inspiration of this paper.And corresponding suggestions are given from the product designing and the external environment,hoping to promote the healthy development of Chinas auto financing companies.In terms of product designing,auto finance company can reduce the risks of the product by reducing the concentration of assets in the pool;and use the combination of internal and external credit enhancement methods to control the cost of issuance;add the continuous purchase structure,the redblack pool conversion mechanism and other trading structures to improve the efficiency of the funds.Suggestions for the external environment mainly include improving relevant laws and regulations,increasing liquidity in the secondary market and introducing secondary investors.