Strapped-for-Cash Chinese Companies Find New Ways to Borrow
- ABS sales by Chinese companies more than doubled last year
- Doubts about ring-fencing of collateral for ABS: Genial Flow
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Cash-strapped Chinese companies are ramping up sales of asset-backed securities to raise funds as they face record delays in collecting payments from customers.
Structured note sales backed by assets such as receivables jumped 130 percent to 455.2 billion yuan ($65.7 billion) last year, based on official data released Monday. They accounted for 54 percent of all asset-backed securities issued in China, up from 33 percent in 2015. By comparison, notes backed mainly by bank loans, which used to constitute the bulk of ABS issuance, fell 4.6 percent in 2016, the data show.