What NAFMII's asset-backed MTNs mean for securitisation in China
August 08, 2012 | BY
clpstaff &clp articlesChina's National Association of Financial Market Institutional Investors (NAFMII) has released draft rules for a securitisation instrument for non-financial issuers
NAFMII's asset-backed medium term notes (ABN) are receiving a more positive response from the market than PBOC's asset-backed securitisation (ABS) instrument, announced in March.
While financial institutions are still waiting for their individual quotas in the 50 billion total in yuan ABS issuances, NAFMII's ABNs are moving forward.
Counsel expect SMEs to take advantage of ABNs. Kingsley Ong of Eversheds Hong Kong told IFLR that corporates with a lower rating will be keen on the instrument because their financing costs will otherwise be high if they have a low rating. If they have good assets that they can put into ABNs, they will get cheaper funding, which will help their business model.
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