Huarong Invites Foreign Advisor for Asset-based Securitization

The China Huarong Asset Management Corporation (CHAMC), has invited the Asset Management Corporation (KAMCO) of the Republic of Korea (ROK) to work as its advisor in asset-based securities,), according to contract sealed Thursday.

The ROK company will help Huarong select several portfolios from its 407.7-billion-yuan in assets and provide consultation for securities structure design, credit-rating and securities issuance.

When all the preparation work is finished, Huarong plans to introduce a brand new financial product this year, which is called "asset-based securities."

Asset-based securitization is a key financial renovation vehicle which was introduced as early as the 1970s in western countries. The initiator first created an asset pool, then sold it to the special purpose vehicle (SPV), which mainly deals with such businesses as asset purchase and insurance of asset-based securities.

Yang Kaisheng, president of Huarong, said that among Huarong's huge assets, there are some potentially good ones that can meet the demand of securitization purposes.

"If we can successfully issue asset-based securities, we will be able to dispose our asset faster, and it will also be conducive to China's asset securitization development," Yang said.

KAMCO is the sole state-owned asset management corporation in ROK.

People's Daily Online --- http://english.peopledaily.com.cn/