Research on ABS Project Financing and SPV Establishmentin China

Abstract

Due to the impact of the COVID-19, there is a shortage of funds in all countries. As a new project financing mode, Asset-Backed Securitization(ABS) is undoubtedly the most dynamic one. At the same time, the existence of Special Purpose Vehicle(SPV) makes ABS project financing mode become the most reliable one. This paper mainly introduces the operation process of ABS project financing mode and the influencing factors of SPV establishment and countermeasures in China. In short, ABS financing mode is to collect those stable cash flows that lack liquidity but can generate forecasts, and then issue securities in the market through SPV rating and credit enhancement to obtain a large amount of founds. As the most important part of ABS project financing mode, SPV determines whether the project can proceed smoothly. SPV can be a professional financing institution, and it can also be a shell company. The main purpose of SPV is to carry out credit rating and upgrading of issued securities so as to enter the high-level securities trading market and obtain more funds.