When ABS financing mode raises funds by issuing bonds, the interest rate is generally low, which can effectively reduce the financing cost. At the same time, the use of ABS financing mode cuts off the risk of the original owner of the project. Finally, it raises funds by issuing high-grade bonds through SPV, which avoids the limitation of the original owner's asset quality.
The advantages of ABS financing mode bureau include attractive income; High credit rating; Diversification and diversification of investment; Predictable cash flow; Small event risk, etc. On April 3rd, 1998 China's first ABS securitization financing scheme aimed at obtaining international financing was first implemented in Chongqing.
Operation process of ABS financing mode: 1. Set up a special project financing company; 2. Seek credit rating agencies to give financial professional companies the highest credit rating; 3. The project sponsor (fund-raiser) transfers the future income right of the project; 4. Special project financing companies issue bonds to raise funds for project construction; 5. Professional project financing companies organize project construction and operation, and repay the debt principal and interest with the project income; 6. Free transfer of project assets as stipulated in the contract.