Bank of China launched its first two issues of non-performing asset backed securities at the end of March, including the lender’s first issue of securitised rights to non-performing personal credit cards.
The Zhong Yu 2017 First Round Non-performing Asset Backed Securities and Zhong Yu 2017 Second Round Non-performing Asset Backed Securities were issued by BOC successively on the interbank market on 29 and 30 March.
The first issue is believed to be BOC’s first non-performing asset backed security with non-performing personal credit cards at its core.
The principal payment order is divided into preferential grade and second grade tranches, with preferential grade securities receiving a AAA credit rating with an issuance volume of 14.4 billion yuan and issuance price of 4.5%
Second grade securities were unrated, and had an issuance volume of 44 million yuan.
The second issue is BOC’s first non-performing asset security with non-performing personal home loans at its core, and is similarly divided into preferential grade and secondary grade tranches.
Preferential grade securities for the second round received a credit rating of AAA, with an issuance volume of 419 million yuan and issuance price of 5.0%.
Bank of China said that during this latest issue there was a surge in subscribers for secondary-grade non-performing asset-backed securities, and that in future the bank would hasten the release of non-performing asset back securities products in response to calls from the supervisory and regulatory authorities.