Shanghai Approves China’s First Shelf Registered Public Housing Asset-backed Security


China’s financial authorities have given their approval to the country’s first shelf registered public housing securitised products in Shanghai.

The “Guokai  – Shanghai Real Estate First to Eighth Stage Public Rental Housing Asset Backed Special Plan” (国开—上海地产第一至八期公共租赁住房资产支持专项计划) obtained a letter of no objection from the Shanghai Securities Exchange (SSE) on 7 December with an approved quota of 10 billion yuan.

State-owned policy lender the China Development Bank is overall coordinator for the plan, with China Development Bank Securities serving as the manager and lead underwriter and Guotai Junan Securities acting as joint lender.

Shanghai Land (Group) (上海地产集团) is the service agency for the plan, with the underlying assets for the securities being rental income from its public rental housing.

The plan adopts one-time shelf registration with an approval quota of 10 billion yuan and plans to issue 1.8 billion yuan in securities in the first stage. Senior securities are rated as AAA with a maturity of 25 years.

According to the Chinese central bank’s official news outlet the plan enjoys the strong support of the China Securities Regulatory Commission (CSRC) and the SSE as China’s first shelf-registered public housing asset-backed security.

“The product uses market-based methods as means of innovating the use of direct financing tools, invigorating the asset stock of state-owned enterprises, increasing the ability of public rental housing to rely upon its own cash flows, and expanding the vigour of support for housing for low and medium-income households.”