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China ABS Awards

Best firm for securitization 2018

China Merchants Securities

Chinese banks, securities houses and foreign banks operating in China (either through their local branches or an onshore joint venture) have worked hard to boost not only volumes in the asset-backed securities market, but also the level of structural complexity.

The competition has been fierce, but one securities house has managed to maintain its leadership in China ABS underwriting.

China Merchants Securities, part of China Merchants Group, has ranked number one in China ABS underwriting volumes for three consecutive years since 2015, when the central bank relaxed rules and spurred growth in issuance. The firm is on track to wrap up 2018 with the same success.

During our awards period, CMS underwrote 125 deals in the interbank and exchange markets (including asset-backed notes, or ABN) worth Rmb256 billion ($37 billion), boasting a 14.4% market share, according to China financial data provider Wind. It also dominated the largest asset class, residential mortgage-backed securities, ranking number one not only between October 2017 and September 2018 but also every year since 2015.

CMS has a diverse client base. It has worked closely with every big state-owned bank, including China Construction Bank, the largest originator of RMBS in the country. It has also done deals for policy banks and joint-stock banks, as well as global companies such as BMW, Ford and Mercedes-Benz.

The firm’s name could also be found in an overwhelmingly large number of landmark or even market-opening trades during our awards period, including the first ABS deal sold through Bond Connect, the first Bond Connect collateralized loan obligation, the first Bond Connect RMBS and the first RMBS that received a triple-A international rating.

In auto ABS, CMS worked on 17 transactions during our awards period, according to Wind, over three times the number its closest rival had done. In terms of volume of auto ABS underwriting in China in the first three quarters of 2018, it also surpasses that of China Citic Securities for the first time. In corporate ABS, the firm was also a front-runner, taking part in innovative transactions such as ABS backed by revenues from a sewage-treatment public private partnership (PPP) project, as well as a market-opening real estate investment trust ABS.

China Merchants Securities has structured, priced and sold some of the most innovative deals in China’s securitization market this year. The fact that it has also done more than its rivals is simply icing on the cake.

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