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China securitization new issuance surges 69% YOY in Q1

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China securitization new issuance surges 69% YOY in Q1

New issuance in China's securitization market soared 69% year over year to 374.1 billion yuan in the first three months of the year, buoyed by residential mortgage-backed securities and corporate receivables transactions, S&P Global Ratings said in a report published May 21.

RMBS issuance jumped 34% year over year to 67.8 billion yuan as the number of issuing banks increased to five from two.

Corporate receivables securitization issuance grew 1.3x to 78.9 billion yuan, reflecting regulatory tightening of the corporate funding channel in banks' wealth management products, according to the report.

Auto loan asset-backed securities issuance more than doubled to 31.2 billion yuan, driven by repeated issuance from captive auto finance companies and low issuance in the year-ago period, the report said. The rating agency expects improving debt serviceability, enhanced underwriting and risk control, and securitization's structural protection to support auto loan ABS for the rest of the year.

Total collateralized loan obligations issuance declined 17% year over year to 7.8 billion yuan in the first quarter, partly reflecting weakened investor appetite.

As of May 20, US$1 was equivalent to 6.91 Chinese yuan.