Zhang Xin, former in-house counsel at China Construction Bank,
reviews the emergence and development of this structure and argues
that the secured loan arrangement is the core of a successful
deal
The end of the millennium brought with it a boom in Euromarket
securitization. It was not only the scale of cross-border deals
that impressed, but also the more complicated structures innovated
within creative financial sectors and investment banks.
One trend is particularly worthy of attention: the emergence and
development of project-backed securitization, which derives from
traditional asset-backed securitization techniques, but encompasses
a different market philosophy. The term "project-backed
securitization" is defined as the financial device that securitizes
cash flow streams derived from the whole business of one project or
a group of projects.
The emergence of project-backed securitization
Traditionally, asset-backed securitization refers to the
issuance of marketable securities backed by the expected cash flow
from a pool of specific assets (eg,...