NPL-backed securities sell off to quicken this year
Bad debts from credit cards to property loans being wrapped up together and sold on by burdened Chinese banks
Chinese banks have been selling off a wide variety of non-performing loans, ranging from credit card debt to loans to SMEs, as they attempt to tidy up their balance sheets.
And the pace of issuance of such securities, backed by non-performing loans, is set to increase this year, according to analysts at Moody’s Investor Service.
Some 16.33 billion yuan (US$2.36 billion) worth of securities backed by non-performing loans were issued by Chinese banks between May last year, when the market reopened, and the end of March this year.
“Our analysis of the 16 NPL asset-backed securities deals issued to date shows the securitisation of a wide variety of non-performing assets, including secured and unsecured loans across a range of asset classes, such as credit cards, corporate loans, small and medium enterprise loans and residential mortgage loans,” said Chen Xue, a Moody’s analyst.
One recent development for Chinese NPL asset-backed securities market is that some deals have securitised a mix of both secured assets and unsecured loans.
