Bank of Communications Issues Residential Mortgage-backed Securities via Jucai Blockchain
One of China’s big five state-owned banks has used an independently developed blockchain system to issue over USD$1.3 billion in residential mortgage backed securities (RMBS).
Bank of Communications raised a total of 9.314 billion yuan (approx. USD$1.352 billion) via issuance of the Jiaoying (交盈) RMBS, with a rate of 3.80% for the senior A1 tranche, which was 2.25 times oversubscribed, and a rate of 4.78% for the senior A2 tranche, which was 2.36 times oversubscribed.
BoCom said that this is the first RMBS issue conducted on the market based on the use of blockchain technology.
BoCom independently developed the “Jucai Chain” (聚财链) platform used for the RMBS, which it refers to as an “investment bank full process blockchain asset securitisation platform.”
The platform was first unveiled in June 2018, with BoCom commencing the uploading of data to the system the following month according to domestic reports.
According to BoCom the goal of the Jucai Chain is to serve as a comprehensive investment banking operations platform, connect all participants in ABS operations, achieve high-efficiency process and data integration, and create an “open, shared, reliable investment banking ecosystem [and a] common destiny entity in a completely new investment banking era.”
The BoCom R&D team said that it is currently working on an accompanying suite of product templates to support the rapid and flexible issuance of multiple types of asset-backed securities, as well as “rapidly adapt to market changes and policy adjustments.”
The product templates for ABS will cover credit card instalments, real estate mortgages, non-performing loans, micro-loans, accounts receivable, trust income rights and lease rent.