Text: However, everything depends on human effort. Whether our employees in the fixed income industry can keep the sun shining in the layers of obstacles is more concerned about whether they can keep up with the trend in the times and gain a place. Asset securitization has a complete product structure system and controllable risks, which is an area that we should focus on. At present, the real estate enterprises and urban investment companies that we are in daily contact with all have such property assets, which provide us with a feasible basis for financing schemes.

On weekdays, the author occasionally contacts the business personnel of the department to discuss the financing scheme with real estate as the underlying asset, or some business personnel urgently need to seek feasible solutions to win the recognition of customers. In most cases, such projects have some problems, such as unclear property rights, unclear future capital gains, involving many subjects, complex financing structure and so on. , leading to a low degree of grasp of pre-planning, and some businesses are accompanied by unskilled employees. In order to provide a more concise and feasible scheme, the author combines the experience of colleagues, summarizes and reports to colleagues on weekdays, hoping that my stupid pen can become a brick to attract you.

1. Who is our customer?

At present, we usually meet the following customers:

1, a group company focusing on traditional real estate development;

2. Light-asset housing developers with high-quality customer acquisition capabilities;

3. City investment companies with highway toll rights, hotels, exhibition centers and other assets.

Because the customer's own business model, regional background and assets are directly related to the customer's category, the situation under different categories is quite different, so the preliminary classification of corporate customers is the first step for us to reasonably intervene in the financing plan.

Figure: Common operating modes of real estate developers

Obviously, the real estate development model based on land transfer is not suitable for ABS financing service because of the unpredictability of cash flow. Whether it is customers who adopt real estate development mode or real estate operation mode, mature projects that are already in the marketing/property management operation stage are the main targets of our ABS financing services.

Real estate assets suitable for ABS business must have the characteristics of stable operating income and large room for real estate appreciation, so we can simply divide the daily real estate assets into the following categories:

(1) office building

The highly standardized operation management and the mature follow-up management of office buildings are beneficial to the duration management of ABS. At the same time, due to the obvious regional reasons for the rent difference of different office buildings, it is more appropriate to choose the property in the first-and second-tier core cities.

(2) Shopping malls

Property management ability varies greatly, passenger flow varies greatly, and it is greatly impacted by e-commerce, mainly relying on store rent.

(3) apartment

Apartment REITS and long-term rental apartments are in the development stage, such as freehand brushwork, Rubik's cube, mushroom apartment and so on.

(4) Hotel

Only a well-run hotel property can become the operating basis of REITS-like underlying assets, and at the same time, it also takes into account regional factors, focusing on the first-and second-tier core areas.

(5) Logistics and warehousing

I have never met such a customer in my business, but with the development of domestic e-commerce industry, there is room for logistics warehousing real estate to become ABS assets.

(6) For buildings with many pre-sale houses, the sold parts performed well.

(7) Infrastructure and others.

For PPP projects that have been put into storage, such as infrastructure projects with highway toll rights, it is suitable to move closer to PPP-ABS.

2. How to analyze the financing needs and customer background?

2. 1? Customer analysis

In the above varieties, we will generally meet the following types of customers:

(1) real estate enterprises;

(2) Non-real estate listed companies/city investment companies that finance property or project assets.

For (1) customers, we should make a preliminary judgment through the Letter on Trial Supervision of Corporate Bonds in Real Estate and Overcapacity Industries, and confirm whether the project can be established according to the company's project establishment standards.

As mentioned above, the real estate development industry (excluding long-term rental apartment enterprises) can be divided into two categories: one is represented by Vanke, and its model is rapid turnover and rapid expansion, which is adopted by mainstream developers such as China Shipping, Poly, Greentown and Jindi. At present, the biggest challenge is the slow urban expansion, and the developers of Vanke model need to enter more and smaller urban markets. The high point of the market scale of first-tier cities has passed, and the total scale has gradually shrunk.

The other is the high gross profit and slow development model represented by the Yangtze River, which mainly relies on relatively strong financial strength and government resources. In the initial stage, the core area of the city was laid out with heavy money, and the time was exchanged for space, and the land value-added income was obtained by slow development. Among them, Sun Hung Kai, Henderson, New World, Tomson and other developers tend to this model. However, this model may face more problems, mainly because the land acquired by first-tier cities through the open market itself has fully realized the space for future housing price increases, followed by the prohibition of hoarding land in the capital market or real estate industry supervision.

In view of this, for the housing enterprises with declining scale and regional transfer to third-and fourth-tier cities, the property they choose is very important for issuing ABS.

For (2) customers, it is recommended to fully investigate the actual controller and controlling shareholder level first, and it is generally recommended to reach AA level (taking New Century, Dagong and China Bond Credit as examples).

2.2? Financing demand analysis

The second step is a preliminary analysis of customers' financing needs, which can be divided into:

(1) The financing ability is low, and the operation is average, so it needs to be refinanced due to loan repayment;

(2) It has good financing ability, good operating conditions, certain regional strength and sufficient cash flow, and needs financing to expand its scale;

(3) Financing needs arising from non-business reasons, but some achievements need to be achieved.

So after obtaining the basic information, how should we make a preliminary analysis? We can make a judgment after knowing the following situations:

1) The current stock debt scale of the enterprise and the debt concentration in the next three years;

2) What kind of financing methods are mainly used for stock debts, and the horizontal range of borrowing costs;

3) The liabilities that the enterprise intends to use as ABS assets include development loans, operating property loans, trusts, asset management plans, etc. ;

(4) Whether the assets to be acquired involve disputes or lawsuits;

5) Whether the enterprise is ready for expansion in the next three years;

(six) the business performance and market ranking of the enterprise in the last three years and the latest period. For leasing, we can see whether the gross rent is 654.38 billion yuan and the rental rate is above 80%. For the sales category, we can preliminarily observe whether there are unfavorable trends in inventory cycle, development cycle and sales price.

3. Discussion on design ideas and schemes of various classified products.

? Business departments generally pay attention to customers' needs, and comprehensively consider the financing period, interest rate, issuing place, issuing varieties, repayment methods, etc. When considering the financing tools that customers need, we need to know the ABS products that securities companies can provide at present, which are suitable for financing through property assets, mainly including CMBS and REITS.

(1) The first step of project structure design: select products and property assets that meet the customer's expectations according to the core points.

After obtaining the ABS issued by the customer, the project personnel can first understand the customer's demands. Generally speaking, customers' needs mainly include:

1) realize off-balance sheet assets and reduce leverage;

2) Improve the financing rating and reduce the financing cost;

3) Other aspects, such as the company's strategic requirements for innovative financing products, do not want the product tax burden to be too heavy, and seek new financing channels.

Then let's take a look at the key points of the project structure of CMBS and REITS, and then analyze the customer requirements.

Table 1: Key points of the first step of the structure involved in the project.

When designing similar projects, we can look at the published cases of CMBS and REITS in the market and consider the structure, scale and credit enhancement method.

Table 2: Reference 2: Preliminary Precautions for 2:CMBS Services

Table 3: Reference to the initial concerns of similar real estate investment trust fund business

Due to the lack of public information, the information I can obtain is limited, but from the published cases, after the business side knows the financing needs of customers, it can consider the following:

(1) in product selection

1) Does the customer need a report? If so, CMBS products are not suitable, and products similar to REITS should be designed;

2) Whether the customer is highly sensitive to the tax burden, and if so, REITS-like products are not suitable (it is suggested to consult the local tax authorities on whether the relevant operations involved in adopting REITS-like structure need to be taxed, mainly land value-added tax and income tax);

3) Whether the customer is willing to transfer the property ownership, CMBS does not need to transfer it. Of course, REITS can also set the inferior level to have the priority to buy back, so that customers can regain their property after the product expires.

(2) in terms of product scale

1) CMB products can achieve an evaluation value of 40% to 60% according to the property type and area, ensuring a good over-mortgage rate. Note that at least 50% of the evaluation value is calculated by the income method, but usually when we acquire customers, sometimes there is no evaluation report. At this time, the book value of the investment real estate of the customer's real estate can be used as the initial base;

2) REITS products can be close to the evaluation value, but they have higher requirements for property and evaluation companies. If it is close to the evaluation value, it is necessary to enlarge the intermediate level and inferior level to ensure the over-mortgage rate and rating of priority A file;

3) At the same time, according to the customer's past financing cost and the financing scale, the annual interest payment level is obtained, and the coverage ratio of annual principal and interest payment should be above 1.3 as far as possible, leaving room for stress testing by rating agencies.

(3) in terms of product duration

The term of similar products in the market is long, and there are also some cases where the term is shortened through special design, such as the beneficial right of the rental installment trust on the 1 ST. 1. Because renters can pay back the money quickly and the financing period can be shorter. However, the author believes that in most cases, the property assets owned by our customers are nothing more than apartments, hotels, office buildings, complexes and so on. Considering the low rental-sales ratio and insufficient property income, it is necessary to make the term longer in order to expand the financing scale.

(4) The establishment of the original obligee

Since both China Merchants Bank and REITS have upgraded their ratings through better property and better credit enhancement measures, the original owner may not have a rating when establishing the original owner. At the same time, considering the basic asset design comprehensively, for example, when designing China Merchants Bank, the actual controller company or affiliated company can be the original owner after constructing the trust beneficial right.

But for the design of REITS-like structure, it should be noted that the relationship between property and customers should be fully considered in REITS-like structure. For example, a project company with the property itself as its customer can make the client's main company become the original owner by transferring equity, thus avoiding paying land value-added tax; If the property itself is directly held by the customer, then the way of capital contribution or capital increase to the project company will be regarded as sales behavior, which requires tax. Therefore, it is necessary to ask about the holding of the property during the design and try to communicate with the tax authorities.

(5) Asset service institutions

For large real estate groups, customers are fully capable of managing properties and generally do not need to look for external asset service agencies. For example, the new apartment equity ABS, Safran Fund has its background reasons: the founding partner of Safran Real Estate Fund is Wang, founder and CEO of the new white-collar apartment; Safran real estate fund itself has strong real estate management ability; Beijing CBD, a new apartment, was originally acquired by Safran Real Estate Fund and limited partnership. The equity ABS of the new apartment has no external strong guarantee, and the asset service needs well-known institutions. If you meet similar customers, you can also take famous real estate funds as asset service agencies.

(6) Credit enhancement method

In CMBS and REITS-like products, we generally encounter the following credit enhancement methods: internal stratification, over-mortgage, cash flow over-coverage, deposit, differential payment, external guarantee, liquidity support, power maintenance fee, etc.

The author believes that credit enhancement methods can be divided into effective credit enhancement methods and supportive credit enhancement methods:

CMBS and REITS have several characteristics:

The internal stratification of CMBS is mostly self-sustaining by levels, but it is not necessary. It mainly depends on the quality of assets, indicating that the self-sustaining part has little effect on credit enhancement. For REITS, it is common to be inferior to equity level, and at the same time, when designing the priority scale, at least the cash flow should cover the priority in full every year, and the excess coverage of cash flow is basically more than 1.3 times; At the same time, internal stratification also involves whether REITS can meet the requirements in the table. Most customers of high-quality properties have a strong willingness to hold, but the method of thickening the inferior layer is not suitable for the table.

For the excess mortgage, it is basically more than 1.5 times;

For the difference payment, it must be reflected that the difference promisor has a mandatory supplementary obligation to repay the principal and interest of CMBS or REITS every year before it can be recognized. However, if the original owner has a higher level and has other operating income, the difference payer can be the original owner, otherwise it can be initially set as the controlling shareholder.

Finally, if it is difficult to achieve effective credit enhancement, we can find external strong guarantee subjects to join the framework.

The above are more effective ways to increase credit. For the supporting ways to increase credit:

Such as margin, liquidity support, etc., are mostly used to protect liquidity and control the liquidity risk of ABS, and the actual improvement effect is not great.

(7) Other factors that need to be considered in product design.

1) If the property is mortgaged, the bank loan can be repaid with the raised funds, and the original restricted sale status of the property can be lifted;

2) Generally, the term structure of 3+n should be set, so that the product with put option is a redemption arrangement, and the successful withdrawal of the project is guaranteed by the principal creditor's rights. Here, we should distinguish between resale and repurchase, and the right exerciser of the latter is the original right holder;

3) There are many aspects of property inspection, such as where the office business circle is, to what extent the changes in rent level, vacancy rate, tenant industry, rent-free period or preferential conditions will not affect the stability of cash flow, and high-quality tenants (well-known enterprises) are more likely to reduce the situation of default in rent withdrawal;

4) When considering the annual income growth rate when setting the scale, we should fully consider the objective historical basis and the average level of the local market to calculate the income growth, and calculate the annual coverage multiple through the income growth;

5) If the property assets provided by customers are insufficient, you can ask whether there are more property asset packages that can be packaged across regions and formats. In this way, the correlation of default can be reduced as much as possible in the rating process, and even further upgrading can be carried out.