To respond to the call of the central government for ensuring growth, promoting reform, making structural adjustment and improving people’s well-being and further give play to the functioning of housing provident fund to better meet the demand of paying employees for housing consumption, and act in accordance with the resolutions of Ministry of Housing and Urban-Rural Development, Ministry of Finance and the People’s Bank of China requiring cities with favorable conditions to actively advance housing provident fund loan asset securitization in an effort to make good use of housing provident fund loan assets, Shanghai Provident Fund Management Center has vigorously probed into mortgage-backed conduit securitization for pooling new capital from the market to push ahead with the sustainable development and advancement of the housing provident fund cause.

The shgjj 2015-1 mortgage asset backed security number one and number two was successfully rolled out on 8 December 2015 after approval by Ministry of Housing and Urban-Rural Development and the People’s Bank of China, featuring an aggregate pool of RMB 6.963 billion yuan, coupon rate set with the bookkeeping filing approach. It comprises RMB 1.94 billion yuan worth of asset-backed security number one, including prime A1 grade, prime A2 grade and the subprime grade, with coupon rates for the prime grades being 3.20% and 4.40% respectively; and RMB 5.023 billion yuan worth of asset-backed security number two, including the prime grade and the subprime grade, with the coupon rate for the prime grade set at 3.65%.

Housing provident fund home loans, with dispersing risk and extremely low delinquency rate, is one of the best quality underlying assets, transferable in the interbank bond market in wake of securitization and thus appealing to various investors. The overall bid-to-cover ratio reached 1.94, indicating high market recognition of the housing provident fund home loan assets backed securitization.

The issuance has come to epitomize the success in innovation of housing provident fund in launching the mortgage asset backed securitization in the interbank market as a good attempt in making the market play a decisive role in allocating resources in a bid to revitalize the existing loan assets. The pooled fund shall be entirely used as an alternative source for housing provident fund home loans, to be conducive to ameliorating paying employees’ housing conditions, alleviating their burden for home purchase and further unleash the bonus of the housing provident fund system to push ahead with social and economic development.