On October 30, the green assets-backed special program SJG643 is issued by Guohai Securities as the scheme manager and sales institution.
The project is the first ABS issued by the China State Railway Group and the first green ABS project backed by assets of railway tickets in China.
The originator of the ABS is Inner Mongolia Jitong Railway Co., Ltd., a subsidiary of China State Railway Group (holding a 90% stake), and Guohai Securities as the scheme manager and sales institution.
The total size is 900 million yuan, and the basic asset is the ticket revenues of railways. The priority classes of the asset-backed securities are rated AA+ by China Chengxin Securities Rating Co., Ltd., with a term of 8 years.
The ABS product is based entirely on the credit of Jitong’s railway and basic assets, and the China State Railway Group did not provide credit enhancement.
There are already ABS products backed by assets such as bus tickets, subway tickets, ship tickets, highway tolls, flight tickets and other related products in the transportation field, and the issuance of this program also enriching the basic assets involved ABS programs carried out in securities exchanges.
In recent years, China's high-speed rail industry has developed rapidly and has become a shining national business card.
However, the public welcharacteristics and pricing mechanism of the railway have in the long term led to small profits in the operation of railways’ passenger-targeted assets, lack of project construction capital and heavy debt burden.
After China’s reform has entered a more difficult phase, the contradiction between accelerating investment and construction and lack of funds has become more prominent with the railway system as an important growth engine and infrastructure.