Sustainable Construction and Financing—Asset-Backed Securitization of Expressway’s Usufruct with Redeemable Rights

Qiming  Zhang; Linda Yin-nor Tjia; Biyue Wang; Aksel  Ersoy

doi:10.3390/su13169113

Sustainable Construction and Financing—Asset-Backed Securitization of Expressway’s Usufruct with Redeemable Rights

Qiming Zhang^*, Linda Yin-nor Tjia^*, Biyue Wang, Aksel Ersoy

^*Corresponding author for this work

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

3 Citations (Scopus)

71 Downloads (CityUHK Scholars)

Abstract

Asset-backed securitization will greatly promote the sustainability of infrastructure construction and financing. However, there are quite limited researches conducted in this field. Given the project characteristics of infrastructure project securities, this paper proposes the issuance steps of redeemable asset-backed notes (ABN) based on the infrastructure project’s usufruct as the basic asset. Taking the expressway franchise as an example, the issuing scale and coupon rate of the redeemable ABN are determined by the expected cash flow of the expressway, the term structure of random interest rates, and the option-adjusted spread (OAS). In addition, this research analyzes the duration, convexity, and OAS.

Original language	English
Article number	9113
Journal	Sustainability
Volume	13
Issue number	16
Online published	14 Aug 2021
DOIs	https://doi.org/10.3390/su13169113
Publication status	Published - Aug 2021

Research Keywords

asset-backed securitization
redeemable asset-backed notes
infrastructure project

Publisher's Copyright Statement

This full text is made available under CC-BY 4.0. https://creativecommons.org/licenses/by/4.0/

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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title = "Sustainable Construction and Financing—Asset-Backed Securitization of Expressway{\textquoteright}s Usufruct with Redeemable Rights",

abstract = "Asset-backed securitization will greatly promote the sustainability of infrastructure construction and financing. However, there are quite limited researches conducted in this field. Given the project characteristics of infrastructure project securities, this paper proposes the issuance steps of redeemable asset-backed notes (ABN) based on the infrastructure project{\textquoteright}s usufruct as the basic asset. Taking the expressway franchise as an example, the issuing scale and coupon rate of the redeemable ABN are determined by the expected cash flow of the expressway, the term structure of random interest rates, and the option-adjusted spread (OAS). In addition, this research analyzes the duration, convexity, and OAS. ",

keywords = "asset-backed securitization, redeemable asset-backed notes, infrastructure project",

author = "Qiming Zhang and Tjia, {Linda Yin-nor} and Biyue Wang and Aksel Ersoy",

year = "2021",

month = aug,

doi = "10.3390/su13169113",

language = "English",

volume = "13",

journal = "Sustainability",

issn = "2071-1050",

publisher = "Multidisciplinary Digital Publishing Institute (MDPI)",

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T1 - Sustainable Construction and Financing—Asset-Backed Securitization of Expressway’s Usufruct with Redeemable Rights

AU - Zhang, Qiming

AU - Tjia, Linda Yin-nor

AU - Wang, Biyue

AU - Ersoy, Aksel

PY - 2021/8

Y1 - 2021/8

N2 - Asset-backed securitization will greatly promote the sustainability of infrastructure construction and financing. However, there are quite limited researches conducted in this field. Given the project characteristics of infrastructure project securities, this paper proposes the issuance steps of redeemable asset-backed notes (ABN) based on the infrastructure project’s usufruct as the basic asset. Taking the expressway franchise as an example, the issuing scale and coupon rate of the redeemable ABN are determined by the expected cash flow of the expressway, the term structure of random interest rates, and the option-adjusted spread (OAS). In addition, this research analyzes the duration, convexity, and OAS.

AB - Asset-backed securitization will greatly promote the sustainability of infrastructure construction and financing. However, there are quite limited researches conducted in this field. Given the project characteristics of infrastructure project securities, this paper proposes the issuance steps of redeemable asset-backed notes (ABN) based on the infrastructure project’s usufruct as the basic asset. Taking the expressway franchise as an example, the issuing scale and coupon rate of the redeemable ABN are determined by the expected cash flow of the expressway, the term structure of random interest rates, and the option-adjusted spread (OAS). In addition, this research analyzes the duration, convexity, and OAS.

KW - asset-backed securitization

KW - redeemable asset-backed notes

KW - infrastructure project

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U2 - 10.3390/su13169113

DO - 10.3390/su13169113

M3 - RGC 21 - Publication in refereed journal

SN - 2071-1050

VL - 13

JO - Sustainability

JF - Sustainability

IS - 16

M1 - 9113

ER -

Sustainable Construction and Financing—Asset-Backed Securitization of Expressway’s Usufruct with Redeemable Rights

Abstract

Research Keywords

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