Editor’s note: in September 13th this year, the city held the government and social capital cooperation (PPP) will promote the work of the meeting, pointed out the need to promote the construction of PPP project, so PPP model has become an important means to revitalize the asset quality, solve the dilemma. So what exactly is the PPP project? PPP project will bring us what kind of help? In modern society, the fierce competition, only to understand government policies, follow the footsteps of government, enterprises can win in the talent shows itself in the society. Lengshuijiang public news will be officially opened PPP project knowledge seminars to help you soar
In December 26, 2016, the NDRC and the Commission jointly issued on the traditional infrastructure of government and social capital cooperation (PPP) project asset securitization related work notice (hereinafter referred to as the notice ), described as a ripple, not only caused great repercussions in the industry, nearly two days more PPP stocks also rallied. Although many industry experts put forward a lot of practical difficulties and obstacles from the prudent perspective, but we believe that the PPP from the assets and capital market formation as soon as possible to achieve effective docking, revitalize the stock of assets, PPP project investors and broaden investment channels for capital market investment main body of this trend, the file is a major favorable policies to promote the development of PPP.
We very much agree with Long Yuan Yan Liqun total release basic qualitative understanding to notice the night of the conference call in the notification, the notice that the basic attitude of policy layer PPP assets can do asset securitization, and policy support to do so, then, the parties need to main problems to face is: how to do?. The voices in the confused, as has the rich experience in asset securitization and PPP practice in the area’s legal team, we wish to briefly and systematically combing the PPP asset securitization operation to a practice analysis, and put forward our views on the topic of hot debate currently exists for reference and discussion of the parties asked:
Note: according to the definition of asset securitization and domestic asset securitization business development present situation, the domestic general asset securitization business model including credit asset securitization, asset securitization, asset backed notes, insurance asset backed plan four major forms. In view of the notice issued jointly by the State Development and Reform Commission and the Commission, the proposed PPP asset securitization is the SFC subsidiary securities companies and fund asset securitization business management regulations provisions of the enterprise asset securitization business, this paper introduces the asset securitization refers to the enterprise asset securitization, asset backed special plan.
The legal definition and essence of Asset Securitization
Two, PPP project future cash flow generation
PPP（Private Public Partnership）的基本定义为政府与私人资本在基础设施和公共服务领域形成的各种合作关系，其基本功能包括融资功能和提升公共产品和服务供给效率，在我国，PPP的发展历经了2014年之前的传统特许经营阶段和2014年之后的PPP2.0版阶段。PPP项目的基本交易结构如下：
PPP (Private Public Partnership) the basic definition for the cooperation between the government and private capital formation in the field of infrastructure and public services, the basic functions including the financing function and enhance the supply efficiency of public goods and services, in China, after the development of PPP after 2014 before the traditional franchise stage and the 2014 version of PPP2.0 stage. The basic transaction structure of the PPP project is as follows:
PPP basic transaction structure (Figure 1)
The PPP project future cash flow according to the project itself business, quasi business, public welfare property is divided into three types: 1, users pay; 2, users pay government subsidies 3, feasibility of government pay gap. In the above three types, item company to provide to meet the requirements of the public service as the basis in order to obtain the corresponding payment, so PPP item company in the future cash flow is in securitization transactions are not started from the creditor’s rights, creditor’s rights belongs to the future.
In addition, asset securitization asset base negative list although the basic assets by the local governments directly or indirectly, the debtor included in the negative list, but also explicitly local government in accordance with the prior public benefits agreement rules, cooperation in the government and social capital (PPP) under the mode of financial subsidies shall be paid or borne out of the negative list, this is the future cash flow of all or part of the PPP project from the government to pay the joint asset securitization provides policy may.
Three, PPP asset securitization basic transaction structure
1, the subscription signed by people and people management subscription agreement, the subscription funds by way of special asset management trustee, manager of the establishment and management of special programs, subscription made of asset-backed securities, as the holders of asset-backed securities.
2, according to the agreement signed with the original owner of the asset purchase and sale agreement, the use of special funds for the purchase of the underlying assets of the original equity.
3, asset services according to the service agreement agreement, is responsible for the asset base of the corresponding revenue collection and recycling. The asset service institutions in the recovery of money will pay basic assets to generate cash flows into account by the special plan, according to the escrow agreement on the custodian of the special plan assets managed.
In 4, the distribution date, according to the plan management manual and the relevant documents of the agreement, issued instructions to the assigned custodian custodian allocated according to the instructions, extraction and funds for special plan expenses designated to pay, and the corresponding funds transfer to registered custodian designated account for the payment of the principal and the expected return of asset backed securities.
Four, PPP asset securitization basic operation flow
PPP asset securitization transaction structure (Figure 2)
1, to carry out due diligence
Due diligence is the primary and basic work of the whole PPP asset securitization project, and is also an indispensable part of the practice of asset securitization. Due diligence assets on the basis of legitimacy should include: operations or cash based assets, transfer of legal ownership of the legitimacy, the underlying assets flow history, should also be on the cash basis future asset flow reasonable prediction and analysis.
Specific to the PPP project, according to the notice provisions of the traditional infrastructure PPP project can carry out asset securitization projects should meet the following requirements: (1) to complete the project approval procedures, norms signed PPP contract, the parties to cooperate smoothly; (2) the project quality standards, to continue the safe operation; (3) have been completed and normal operation for more than 2 years, has continued to produce stable cash flow; (4) the originator of credit is steady, no bad credit records in recent 3 years. In the due diligence PPP project asset securitization, in order to assets on the basis of compliance and the underlying assets can be used as asset securitization to determine which assets on the basis of the future forecast and analysis of cash flow, in addition to the completion of the general law of asset securitization in the basis of due diligence work should also fit the characteristics of PPP based on the investigation on the investment project approval, approval, implementation of PPP project procurement process, in the main PPP project in the form of compliance requirements, and the need for PPP project if there is no guaranteed commitment, through repurchase arrangements, Ming shares of real debt etc. disguised financing of the core and boundary conditions, risk the charge distribution, mechanism of the business model is consistent with the PPP project substantive compliance requirements and the rationality of a comprehensive review and analysis.
2, to determine the underlying asset
According to the definition and operation process of asset securitization, it is the starting point and the most important issue to determine the underlying assets. The provisions of the third provisions asset securitization business management, basic asset refers to comply with laws and regulations, clear ownership, can produce independent, predictable cash flow and a particular property rights or property, at the same time, the underlying assets need to meet the following requirements:
(1) the right to defect or burden: the underlying assets and the underlying assets of the underlying assets should not be accompanied by restrictions on rights, should be clean assets, no mortgage pledge. Can be related to the arrangement, the lifting of the underlying assets related to the burden of security and other rights restrictions can still be used as the underlying assets.
(2) it can be transferred according to law: the basic property can sell the assets to the special purpose entity, so as to realize the risk isolation.
(3) the nature of independence for a particular property or property rights: This is the necessary legal basis of assets, is the basis of specific assets, and independent and does not depend on other property or property rights exist.
3, construction of special purpose vehicle
For enterprise asset securitization, the originator by securities companies, fund management subsidiary or other authorized by the SFC qualified management, the establishment of specialized asset-backed special plan (hereinafter referred to as special plan, namely SPV), risk isolation, credit rating, etc. on the basis of structured assets on this basis, the issuance of asset-backed securities.
4, the transfer of basic assets
As mentioned above, the legal nature of asset securitization is the sale of underlying assets, that is, the originator will be transferred to the underlying assets in a certain way to the SPV, so that SPV based on this asset issue of securities. The transfer of basic assets refers to the promoters to sell assets to SPV, the promoters shall be signed with the SPV basic asset asset purchase agreement.
Main contents of basic asset sale agreement includes: the main rights of SPV include ownership of underlying assets, and related assets from the basic rights (such as accounts receivable guarantee, mortgage or pledge rights); basic assets controlled by SPV management, but not based on their own interests, but to support assets the interests of the holders of securities; when the bankruptcy of the originator, from the sponsor or sponsors of the creditor’s claim on the underlying assets.
5, credit enhancement
There are three main ways of credit enhancement of Asset Securitization: internal credit enhancement, external credit enhancement and mixed credit enhancement.
PPP asset securitization can be integrated using a variety of methods of credit rating, including the internal priority \/ secondary structure, balance of payments, reserve account, but also consider the external measures to increase trust, there are many ways to increase trust of the third party external guarantee, bank liquidity support, insurance three.
6, the establishment and distribution
(1) the establishment of asset-backed securities
The establishment process of the asset-backed securities is about: Subscription people read and understand all the relevant documents and materials, the plan management of people and other intermediary agencies based on trust, agreed to join the special plan, with its own legal RMB funds to subscribe for asset-backed securities, and entrusted the management plan for the subscription agreement, the prospectus the contents of the file will contract subscription funds for the purchase of the original rights of basic assets.
(2) the Fund Industry Association for the record
《资产证券化业务管理规定》已明确将企业资产证券化改为备案制，“管理人应当自专项计划成立日起 5 个工作日内将设立情况报中国基金业协会备案”。
Asset securitization regulations has been clear about the enterprise asset securitization to the filing system, management should be established since the special plan in the 5 working days will be set up at China Fund Industry Association for the record.
(3) listing of trading places
The proposed listing, transfer of asset-backed securities in the securities trading places of special plan, the administrator shall be agreed to submit documents listed on the transfer of securities exchange; filing materials management were submitted to the fund industry association, and the securities exchange shall review the transfer of listing application materials consistent.
According to the current enterprise asset securitization business, the main place of listing PPP asset-backed special plan for the product including three places in Shanghai stock exchange, Shenzhen stock exchange and the inter agency quotation system.
After the listing of the products in the trading place, that is, in accordance with the relevant provisions of the obligation to disclose information until the product liquidation.
Five, PPP asset securitization in the operation of several key points
1, the choice of the original rights and interests of the PPP Asset Securitization
(1) the main body of the implementation of the PPP project, that is, PPP item company. This kind of main body in the project into the operating period after the need to combine the needs of specific projects, including whether there is a funding gap, can reduce financing costs and other factors to determine whether to do asset securitization power. As promoters of item company as the original equity \/ assets for the item company is the basis of income right \/ charging rights, asset securitization financing for item company Huamu metal assets, also need to design how to make rational use of item company to raise funds or raise funds to return investors.
(2) the financing side for PPP item company, including commercial banks, trust companies, financial leasing companies or other third party. We believe that this subject may have greater power to make the originator \/ sponsor, for example, provides a trust fund loan to the item company, which enjoys the beneficial right of the trust, in the PPP item company officially put into operation, the beneficial right of the trust as a basis for the transfer of assets to the special plan, in order to achieve exit we think, this is a good way to withdraw from.