Best for account receivables securitization 2019
Account-receivables asset-back securitization is unique to China. The underlying assets of account-receivables ABS can be roughly divided into two categories: enterprises’ account-receivables obligatory rights and factoring agents’ obligatory rights. Based on these two types of underlying assets, account-receivables ABS can be divided into general and reverse factoring or, as bankers call it, supply-chain ABS.
The market saw rapid growth in issuance volume with the birth of the first supply-chain ABS – Ping An-Vanke Supply Chain Finance Asset-Backed Plan – in 2016.
Citic Securities, the best firm for account-receivables ABS, ranked number one in the value of deals for which it acted as the administrator during our awards period, arranging Rmb67.75 billion ($9.6 billion).
Compared with others, CiticS’s model is more balanced in the account-receivables ABS market, with a strong presence in both general and supply chain ABS.
In December 2018, CiticS acted as the administrator and underwriter for PowerChina’s receivables asset-backed plan. The underlying asset was 40 receivables with an outstanding balance of Rmb2.3 billion from 36 owners across eight industries.
The deal helped the state-owned enterprise expand financing channels and make its low-liquidity assets more liquid.
CiticS has also had a solid performance in arranging and underwriting supply-chain ABS, working with core enterprises such as Evergrande Real Estate Group, China Jinmao Holdings and China Construction Second Engineering Bureau.
Supply-chain ABS, although growing in popularity thanks to the recent clampdown from regulators on real estate companies, only accounts for 55.5% of the total new issuance volume in account-receivables ABS business so far this year, according to Wind data.
As an administrator, CiticS was able to cover the whole product chain from structural design to duration management of underlying assets, which is crucial in helping an underwriter stand out from the crowd.