Real Estate-Backed Securities in China: the Unresolved Issue of True Sale and Bankruptcy-Remoteness
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Real Estate-Backed Securities(‘REBS’) are widely acknowledged as a cost-effective way for enterprises to raise funds directly from market investors through securitising real estate receivables, while the current legal environment in China makes true sale and bankruptcy-remoteness, two characteristics that separate REBS from loans, impossible to be achieved. This article offers an engaging introduction to REBS by situating it in a wider commercial context, provides a clear description of the typical procedures used in current REBS practice, conducts an in-depth analysis of the causes of the said two problems and ultimately puts forward to two legally modified multiple-tier structures and one final solution which may hopefully be used to solve the said problems.
Asset-Backed Securities, Corporate Financing, Real Estate Investment and Finance, Future Receivables, True Sale, Bankruptcy-Remoteness.