Chinese auto lease programme launched (SCI)
AutoChina International has begun securitising a portion of its commercial vehicle leases through a landmark partnership with CITIC Trust. This programme is believed to be the first of its kind in China.
"Not only does it provide us with another source of financing, it also better matches funding to the actual times when the leases are originated," says AutoChina chairman and ceo Yong Hui Li.
Each month, up to CNY60m of AutoChina's commercial truck leases will be securitised and sold to investors through CITIC - with the maximum amount expected to increase over time. The resulting investment products will have a one-year maturity and pay interest at rates currently higher than standard Chinese savings account rates.
AutoChina will incur a cost of approximately 9% per annum under this programme. In addition, the firm will continue to own the vehicles that are the subject of such transactions and will be responsible for servicing the existing retail leases.
The new offerings will be rated by CCXI, China's nationwide domestic credit rating agency.
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