Most innovative bank for securitization 2020
Citic Securities has an enviable position in China’s ABS market: it boasts a structuring team with the ability to innovate and a large enough client base to test out those new ideas. The firm has notched up several landmark deals, each opening new ground for others to follow.
In March, the securities house reopened a domestic REIT for the first time. When the deal, Cainiao Zhonglian Citics China Smart Logistics Network REITs, was launched, it included an additional offering mechanism. That allows new injections of assets and funds into the same securitization product, an important breakthrough in moving China’s long-existing quasi-REITs market closer to international standards.
The additional offering mechanism, although not difficult to understand for international investors, was a new concept for both Chinese regulators and investors. Citic Securities had to do a substantial amount of work to familiarize investors and regulators with the product, eventually closing a Rmb885 million ($136 million) deal.
Citic Securities was also a major force behind China’s first interbank non-performing loan (NPL) ABS to be enhanced by a Credit Risk Mitigation Warrant (CRMW), a credit enhancement tool introduced by the central bank in October 2018.