Guotai Junan says issues $80.5 mn of novel margin loan-backed ABS

By: | Published: August 8, 2015 5:30 AM

Guotai Junan Securities Co Ltd , one of China's five biggest brokerages, said on Friday it had issued 500 million yuan ($80.53 million) worth of the country's first asset-backed securities (ABS) backed by margin debt.

Guotai Junan Securities Co Ltd , one of China’s five biggest brokerages, said on Friday it had issued 500 million yuan ($80.53 million) worth of the country’s first asset-backed securities (ABS) backed by margin debt.

The notes, which provide another way of raising capital, will trade on the Shanghai stock exchange, according to a statement posted on the brokerage’s website.

China’s brokerages harnessed a bull run from last November to June to raise capital via private share placements, but market gyrations which started mid-June may make such efforts less profitable in the second half of the year.

The ABS have received an AAA-grade rating and the investor minimum spend threshold is 10 million yuan. They will be issued in two tranches, one of 475 million yuan and a subordinated one of 25 million yuan, the statement said.

Guotai Junan’s debut in June was China’s largest since Agricultural Bank of China Ltd  listed in 2010.

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