Ali Financial Re Run: First Try Small Loan Asset Securitization

After waiting for more than 7 months, the special asset management plan of the Alibaba, which has attracted much attention from the market, was finally officially approved by the SFC. Dongfang securities's cooperation with Alibaba is the first asset securitization project launched by the securities industry based on credit assets.

People familiar with the Oriental Securities told the media that the official reply to the approval of Shanghai Dongfang Securities Asset Management Co., Ltd. was set up in the 1 to 10 special asset management plan of Alibaba, which refers to the product's duration, scale, number of purchases and so on.

"The greatest significance of asset securitization is to revitalize stock assets through securitization technology and enhance the efficiency of capital and asset utilization." A large brokerage asset management department told reporters.

In fact, for small loan institutions, revitalize the stock is of greater significance. Small loan companies can not afford to borrow money from banks or get low-cost funds from interbank markets. They can only use their own funds to run credit businesses. Securitisation of credit assets helps to quickly withdraw funds from institutions like Ali.

　 Risk and return

　　 Orient Securities The cooperation with Alibaba is regarded as the benchmark of asset securitization. Previously, most of the products issued by securities companies were based on the income rights of physical assets.

"Compared to the previously reported plan, the larger change is that the regulatory authorities require splitting into more than one product, each 2~5 billion, with a term of 1~2 years. Therefore, we have approved 10 products at a time. " The above securities holders said.

The partner of this product is the asset management subsidiary of Orient Securities, and the financial business platform of Alibaba, Ali finance. In February this year, the special asset management plan entered the audit channel of the SFC. Because it is an innovative product, the Securities Association also organized experts to demonstrate it and submitted the results to the SFC as the basis for examination.

According to a person close to Dongfang securities, the assets of Ali asset securitization are the credit assets of Chongqing Ali small loan, the total size of which is 5 billion. Among them, 4 billion yuan of priority securities is purchased by social investors, and Alibaba purchases 1 billion yuan of subordinated securities.

The source said that as Ali's small loans were all unsecured pure credit loans, in order to improve the rating of securitized products, the credit enhancement mode of "priority or sub order securities" was adopted, and priority securities were repaid before subprime securities. Moreover, such a combination also reduces financing costs.

Huang Song, Secretary General of the financial and Industrial Development Research Center of Peking University, believes that the annual loan interest rate of Chongqing Ali's small loan is 18%~21%, while the expected yield of asset securitization products is around 6%.

But for investors, taking into account the return of asset securitization products 6%~7% is not high, so the risk of such products is more sensitive, and the security requirements of assets are higher.

As a basic asset, the risk of small claims is still great. Because small loans have no collateral, they can not achieve the risk control by transferring collateral. Ordinary commercial banks can not invest a lot of manpower and material resources to make credit screening for borrowers who apply for small loans. Although Alibaba can obtain credit records by means of Internet financial technology, the basic risk characteristics of such credit assets are still hard to change. A brokerage asset management department told reporters.

This person is worried that once a cash risk arises, it is difficult for securities companies to reveal their products. "Banks have strong capital strength and adequate provision. What do securities companies have?"

　　 take measures to revitalize a factory or a company and make it profitable Capital stock

For Ali small loans, in addition to their own income considerations, the more important thing to get involved in asset securitization is to improve liquidity. Public information shows that Zhejiang Ali small loan company registered capital of 600 million yuan, Chongqing Ali small loan company registered capital of 1 billion yuan. In view of the fact that small loan companies can never finance more than two banking financial institutions, the amount of financing can not exceed 50% of their own capital, which means that the two banks can only lend 2 billion 400 million yuan for loans.

Previously, media reports said that in the first quarter of this year, the number of new loan companies of Ali's small loan business was over 2.5, and 1 million 100 thousand loans were accumulated in the first quarter, totaling 12 billion yuan. In view of this, relying solely on Ali's small loan's own funds is far from meeting the market demand.

In fact, Ali finance has tried several times last year to raise funds through trust channels. In June 2012, Chongqing Ali small loan issued "Shandong trust financial micro credit income rights investment project collection trust plan" through the Shandong trust, and raised 240 million yuan to the society. In September of the same year, the small loan of Ali of the Republic of China again raised 120 million yuan to the society by issuing the "Ali Star 2 collection trust plan".

"The reason why Alibaba adopted trust before and did not adopt asset securitization was because of institutional obstacles. The characteristics of Ali's small loan are "small amount, short duration, and loan back," and the asset backed securities issued for a long period of time, therefore, there is a time mismatch. Huang Song said.

Usually, the so-called asset securitization is a part of assets that can produce stable cash flow, package and build an asset pool, and issue securities on the basis of the cash proceeds from the future. Among them, the stability of cash flow is the most critical factor.

However, unlike general credit asset securitization products, Ali's small loan has the characteristics of "borrowing and borrowing". Ali's customers can borrow and repay at any time, so the basic asset portfolio may fluctuate greatly with the different behaviors of borrowers.

In addition, Huang Song told reporters that the general asset securitization products are relatively long term, can be two years, three years, five years, ten years of calculation, but Ali small loan loan cycle is generally relatively short, probably only a few months or even days, and the specific repayment time is still very uncertain, which appeared short-term loans and long-term securities mismatch.

In fact, the central bank, the Banking Regulatory Commission and the securities and Futures Commission began promoting asset securitization in the interbank market and the exchange market many years ago. The scale of asset securitization in the interbank market is nearly 90 billion yuan, while the development of asset backed securitization in Shanghai and Shenzhen stock exchanges is relatively slow. In recent years, only a few brokerages such as CICC, CITIC Securities and China Merchants Securities have launched products. All these products are based on the income rights of physical assets, such as Unicom. CDMA business The ticket revenue of overseas Chinese town and the right to generate water and electricity in the Lancang river.

At the end of 2 this year, the SFC invited public opinions on the regulation of asset securitization business of securities companies. The management regulations have greatly relaxed the definition of basic assets, including enterprise receivables, credit assets, trust beneficial rights, infrastructure income rights and other property rights, as well as commercial paper, bonds, stocks and other securities, and commercial real estate can be used as the basic assets of securitisation.

In March 2013, for the first time, in the regulations on asset securitization business of Securities Companies promulgated by the Securities Regulatory Commission, it was first proposed that "special planned assets should be formed through the circulation of basic assets and circulation of new similar basic assets". As a result, "circular purchase" for the first time in policy "icebreaking".

The SFC's policy of "circular purchase" for securitized product targets provides policy possibilities for Alibaba's asset securitization. Alibaba can make use of asset securitization products to revitalize its own small loan assets and improve the efficiency of fund utilization.

The asset management department of the large brokerage company also believes that the greatest significance of asset securitization is to revitalize the stock assets and enhance the efficiency of capital and asset utilization, which is in line with the State Council's idea of "optimizing the allocation of financial resources, making good use of increments and revitalizing the stock".

　 Ali accelerated financial layout

Even more than a year ago, Alibaba's attempt in finance may not be able to set off such a big storm. Borrow a fashionable saying: to find the draught that can blow up a pig.

In the afternoon of March 7th this year, the last and most important thing before Ma Yun's "retirement" was to split up and set up Ali small micro financial services group, which is responsible for all the financial innovation businesses of Ali group for small and micro businesses and consumers' personal services.

Before that, there were no entity companies in the financial sector of the Ali group. The two small loan companies located in Zhejiang and Chongqing were the actual operators. The so-called "Ali finance" was only a form of address for the financial business within the Alibaba group.

Lack of commercial banks' ability to absorb money is a hard nut to crack in the expansion of Ali's financial scale. According to the existing regulations, small loan companies do not have the ability to absorb deposits, they can only use their own registered capital, and obtain the maximum scale of financing from the financial institutions which does not exceed 50% of the capital.

However, banks do not make channels. Alibaba Alipay, the nearest cash user, is trying to attract new funding.

The balance treasure, which has just been born for more than half a month, announced the first round of performance at the beginning of this month: as at 24 o'clock in June 30th, the total number of accumulated users has reached 2 million 515 thousand and 600, and the total amount of transferred funds has reached 6 billion 601 million yuan. In just 18 days, Alipay put its partner Tianhong fund Zeng Li Bao products on the largest Monetary Fund in China.

Judging from the current situation of Ali finance, the balance treasure has met the personal financial needs. Taobao financial channel has solved the financial problems of "small white-collar workers", and small loans are difficult to find money for small and medium-sized enterprises. If this is only a point of financial layout, Ali really needs to connect the product line with the product after the deployment.

According to the reporter's interview, since last February, Ali finance has been on a large scale "recruiting troops". Loan audit, financial analysis, and technical architect are the most interested talents in Ali finance. The deposit and loan personnel with Citigroup and HSBC's foreign bank background are the most potential targets of Ali.

Internet Co has set foot in the traditional financial field. It is clear that Alibaba is in urgent need of more external resources. The effective management of credit is an important reason for the existence of banks. Alibaba has excellent material for storytelling - big data. Cooperation with Orient Securities is undoubtedly a bold attempt to speak with big data credit.