December 7th 2012 – Recently, the first asset-backed securitization product of Bank of China, “BOC Phase I Credit Asset-backed Security in 2012” was successfully issued in the interbank market, with an issue size of over RMB 3 billion.

In the course of this issuing, BOC initiated the establishment of asset securitization special purpose trust for part of its corporation credit assets, with China Credit Trust Co., Ltd. as the trustee of such special purpose trust, CITIC Securities and BOC International as joint lead underwriters, and the Hong Kong and Shanghai Banking Corporation Limited as the financial consultant. Two rating agencies, China Lianhe Credit Rating Co., Ltd. and China Credit Rating Co., Ltd. introduced in the securitization process fully guaranteed the interests of investors. In the meantime, BOC also, in strict accordance with relevant provisions, BOC retain an equity tranche of 5% of the deal, so as to ensure the consistency of the interests of the originator and investors.

With such institutional investors as state-owned banks, joint-stock firms, funds, insurances and securities traders participating in the transaction, the issuance of securities was a great success. The launch of this product is of help for financial institutions to take the initiative to adjust the asset structure and transform their business models, so as to better cope with global competition. In addition, it also activated the financial market and enriched financial products, which are conducive to perfection of the price discovery function of financial market instruments and boost of the development of asset securitization businesses.

Re-disseminated by The Asian Banker