Industrial Bank : IB Became Lead Underwriter of the First Consumer Finance ABN on Inter-bank Market

On February 24, Jingdong Baitiao trust asset backed notes of JD.com 2017 (Stage I) (hereinafter called 'Jingdong Baitiao ABN'), with IB as the lead underwriter, were successfully issued on inter-bank market in a directional way. They ranked first among consumer finance asset backed notes in domestic inter-bank market, and this was also the first issue of Jingdong Baitiao asset securitization products on inter-bank market.

It is introduced that 'Jingdong Baitiao ABN' received the notice of registration from National Association of Financial Market Institutional Investors on December 14, 2016 with a total scale of RMB 1.5 billion. The issuance interest rate of senior A securities was 4.80% and senior B securities 5.50%, both at a low price, in spite of a financial strain, and highly recognized by investors. The oversubscription number reached 3.9 times, expanding the source of low-cost capital of consumer finance. As the lead underwriter, IB was responsible for transaction structure design, program promotion as well as introduction and issuance of the products.

Consumer finance assets are characterized by small amount and dispersed pattern. As one of the high-quality assets of JD Group, 'Baitiao' asset securitization is operated in a relatively mature way. On the premise of not lower than the standard of domestic consumer finance asset securitization products of the same type and 'Jingdong Baitiao' securitization products that have been issued, this program keeps strict control of the quality of assets, rationally designs the product structure based on asset cash flow and cyclic frequency, and ensures the cashing of principal and interest of senior investors as much as possible. And secondary asset securitization is subscribed by JD Finance in full.

In order to give full potential to the leading role of new consumption, meet financial needs in key fields of new consumption, and drive industrial upgrading through consumption upgrading, in March of 2016, Guidelines on Providing More Financial Support for New Consumption Fields, co-issued by the People's Bank of China and China Banking Regulatory Commission, pointed out 'to encourage qualified financial institutions to develop exclusive products and offer professional, one-stop and comprehensive financial services in new consumption fields'.

Due to advantages including high standardization and easy to revitalize capital, asset securitization products are well received by consumer E-commerce platforms. They are active in cooperation with banks and securities traders to release consumer finance asset securitization products in Shanghai Stock Exchange and inter-bank market. As of the end of 2016, five ABN projects were issued on inter-bank market and two of them with IB as the lead underwriter.

'To advance asset securitization in consumer finance fields is an important move to satisfy financial needs in key fields of new consumption, expand channels of low-cost capital and promote transformation and upgrading in consumption.' Lin Shu, GM of IB's Investment Bank Department, said.

In recent years, IB's asset securitization businesses including asset backed notes have developed rapidly with enriching types. Currently basic assets cover ordinary accounts receivable of enterprises, rental receivable and consumer finance assets, and play a positive role in reducing financing costs of enterprises, enriching channels of financing, guiding funds to nurture new economic growth engines and serving transformation and upgrading of the real economy.

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