Research On Asset Securitization Product Design Of Company A’s Power Grid Income Right

Under the background of "deleveraging" and "strong supervision",the financing environment of power companies is becoming more and more severe.With the strong support from the state for the development of asset securitization,and the continuous development of the domestic asset securitization market,infrastructure income Asset securitization has gradually emerged and has become a new way of financing for power companies.The pilot of the first batch of publicly offered REITs is also a new financing method for infrastructure construction companies.A hydropower company has both financing needs and continuous operation ability,and has the feasibility of securitization financing.It can design a securitization financing plan for it,and provide experience for solving the financing difficulties of other power companies.According to the financing dilemma of electric power enterprises,financing methods,feasibility of securitization,the characteristics,principles and functions of income right ABS,the international and domestic literature is sorted out;Sequence,credit enhancement method,transaction structure,etc.Design the securitization scheme of A Company’s power grid income right from two aspects: asset side and securities side.Asset-side design includes building the underlying asset pool and forecasting the net cash flow of underlying assets;securitiesside design includes issue pricing analysis,securities-side model design,stress testing for excess cash flow coverage,and transaction structure design.Under stress conditions,the cash flow of the underlying assets can effectively pay the principal,interest and expenses on each redemption date,which proves that the senior/secondary structured stratification in the design of the securitization financing plan can make the senior securities reach the AAA rating.The issue interest rate range can also be determined as [3.1%,4.2%] with reference to the issued AAA-rated income right ABS.Finally,compare the cost of the securitization financing plan with the cost of other financing methods,and get the conclusion that the cost of the securitization financing method is the lowest.There are many similarities between corporate project bond financing and asset securitization financing,but the funds raised can only be used for infrastructure projects under construction,which cannot meet the financing needs of A hydropower company,and are not suitable for company A to finance.Although ABS with income right has advantages such as financing cost,it is difficult to meet the long-term capital needs of power companies due to its weak liquidity.With the first pilot of public REITs in my country,although the requirements for basic assets are relatively high at this stage,in the future,A Hydropower Company is expected to merge basic assets with other power companies to issue public REITs,which has solved its financing dilemma.