On July 28 2017, the special plan for PPP asset-backed project of Huaxi Security―Sichuan Provincial Investment Group (SCIC) has received no-action letter of listing conditions confirmation for asset-backed securities from Shenzhen Stock Exchange. The project was rated by Dagong and is the first-ever district-and-county level PPP asset-backed securitization without external credit enhancement in China.
Dagong contributed its expertise and innovation in PPP asset-backed securitization to the project. Its rating team has been actively developing financial products and proffering quality credit rating services to the market. The project provides a new approach to innovate PPP asset-backed securitization, promotes fruition of other PPP projects and is significant to outstanding PPP project liquidation and local government debt reduction.
Public-Private Partnership (PPP) is a long, mutually beneficial and risk sharing cooperation between a government and private capital for the purpose of offering more public products and services efficiently, in which the two sides collaborate through franchise and government procurement. Thanks to the supports from the central government and related ministries, PPP projects are gaining its nation-wide momentum, attracting private capital to infrastructure improvement, which is consequential to financing, public service, local government debt control, and supply-side structural reform.
After issuance, the project will liquidate quality outstanding parking lot assets and the revenues will be utilized to repay the government’s debts, construct infrastructure and improve public services; and thus more quality assets will be substantiated through reinvestment.
This project has been incorporated in the PPP project repositories of Development and Reform Commission and Ministry of Finance. Meanwhile, it is China’s first quasi-commercial outstanding PPP project and one of the “Big Ten” events of parking industry in China in 2016.