China's public REITs product on inter-bank market was officially released. On February 20, with IB as the lead underwriter, 'IB Wanxin Yuejia Real Estate Investment Trusts Stage I' (hereinafter called 'IB Wanxin REITs') was successfully released on inter-bank market with a total scale of RMB 553.5 million. The issuance interest rate of senior A securities was 4.80% and senior B securities 5.40%, lower than the average level of the market.

The lead underwriter introduced that as the first REITs product on inter-bank market, 'IB Wanxin REITs' was promoted through roadshows and attracted a number of investors from a wide range of fields, covering all kinds of mainstream investors such as commercial banks, insurance, fund, securities trader and trust. The oversubscription number of all levels of securities was nearly two times.

It is introduced that this REITs product was approved by the administrative licensing of the People's Bank of China on December 14, 2016, and was traded and circulated in the national interbank bond market in accordance with regulations of the People's Bank of China. As the lead underwriter, IB was responsible for product structure design, due diligence, submission for examination and approval as well as issuance and underwriting. And China Industrial International Trust Limited and China Industrial Asset Management Limited, subsidiaries of IB, were the trust manager and private fund manager of this project respectively.

As the sponsor of this REITs product, Anhui Xinhua Media Co., Ltd. (hereinafter called 'Wanxin Media') took store property of its eight Xinhua Bookstores as the basic assets to release REITs. Senior A securities amounted to RMB 330 million and Senior A securities had a scale of RMB 223.5 million, both with a term of 18 years and opened every three years. Senior A and B were rated as AAA and AA+ by the rating organization respectively.

In March of 2016, approved by the State Council and issued by National Development and Reform Commission, Opinion on the Key Work to Deepen Reform of the Economic System in 2016 specified 'to make a research and formulate rules of real estate investment trusts and actively develop pilots', providing a guidance for financial institutions to develop pilots of REITs; in October of 2016, the State Council issued Opinion on Cutting Leverage Ratio of Enterprises in an Active and Stable Way which put forward that according to principles of 'real sale and bankruptcy remote', actively develop assets securitization businesses with rights to property including accounts receivable of enterprises and leasing credit as the basic assets, support real estate enterprises in their transformation into 'light asset' operation mode by developing real estate investment trusts, make it clear that the government undertakes the reform by facilitating sound development of REITs market and activating the stock of real estate.

'Against the backdrop of current market environment and policies, to promote REITs businesses on inter-bank market is not only a beneficial attempt of innovative development of inter-bank market but also an essential move to implement that the finance supports the real economy.' Lin Shu, GM of IB's Investment Bank Department, said.

He conceded that on one hand, the first REITs product on inter-bank market helped the investors on the inter-bank market to give full play to their extraordinary ability in identifying risks and low distribution cost, and played a vital role in deleveraging of entities and pushing the large-scale development of REITs market in China; on the other hand, to achieve securitization of real estate of state-owned assets through REITs is also a beneficial attempt of state-owned asset securitization and reform and restructuring of state-owned enterprises that can help cultural enterprises activate the stock and optimize resource allocation and support transformation and upgrading of cultural industry in China.

Asset securitization is one of the financial instruments through which banks serve the real economy. According to 2016 Asset Securitization Development Report issued by China Securities Depository & Clearing Co., Ltd., last year, IB released asset securitization products with a total scale of RMB 153.927 billion, occupying 18.28% of the scale of securitization products nationwide, and helped a number of enterprises activate the stock of asset and met financing needs of entities.

TOP

Industrial Bank Co. Ltd. published this content on 24 February 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 24 February 2017 09:58:15 UTC.

Original documenthttp://www.cib.com.cn/en/aboutCIB/about/news/2017/20170224.html

Public permalinkhttp://www.publicnow.com/view/562C2D739E67B6D6E5C5C1FD0CFB11BFECA95D5C