The Designing And Effectiveness Of Asset-Backed Note Program For Z Company

The construction industry plays a significant role in promoting China’s economic development and ensuring people’s wellbeing and employment.However,the debt-driving enterprise would have a number of obvious problems,such as high debt-asset ratio,low asset turnover ratio and accumulated risks.In particular,state-owned construction enterprises,represented by central enterprises,have been hampered by relevant regulations on deleveraging and reducing financing costs in recent years and the traditional debt financing model has been severely tightened.How to innovate financing models to alleviate financing difficulties in the context of financial reforms that emphasize "developing the capital market vigorously and increasing the proportion of direct financing" has become vital to the transformation and development of construction enterprises.Based on the introduction of the research background and literature review,this thesis first combines the relevant theory of asset securitization,focusing on the development process of China’s asset-backed notes,and explains its design principles and core technologies.Secondly,taking the state-owned construction enterprise Z company as the research object,the thesis analyzes the feasibility and necessity of the proposed trust asset-backed notes scheme,based on the characteristics of the construction industry and the company’s own situation,and focuses in particular on the discussion of the setting of the core transaction links in the scheme design.Finally,from the perspectives of the expected financing benefits and potential risks,the thesis evaluates the effect of Z company’s trust asset-backed notes scheme,and provides corresponding optimization measures.The research concludes that Z company’s asset-backed securities trust program is based on underlying assets such as accounts receivable from the final payment of construction projects and final payment of construction deposit accounts receivable.The securitization product has a 3-year term and a comprehensive annualized cost of 3.06%,with a priority-to-subordinate ratio of 94% to 6%.In terms of the implementation effect of the program,Z company has efficiently utilized its own and its subsidiaries’ existing assets of 2.26 billion yuan,converting them into operating funds of 2.15 billion yuan.Compared to traditional bank loans,the scheme not only has a lower cost of funds but also fewer restrictions on the use of funds,which can significantly improve the company’s fund structure management ability and effectiveness.However,from the perspective of potential risks in the scheme,on the one hand,the management of underlying assets is still undertaken by Z company,and only a collection account is set up for the recovery of underlying assets.There is a lack of a fund supervision account,which may erode the independence of basic assets from the main body of Z company,thus affecting the effectiveness of risk isolation.On the other hand,since the differential payment guarantor is a controlling shareholder of Z company,the actual risk subject of the scheme tends to bear consistent risk hazards.