total issuing amount: rmb€¦ · chang ying 2020-2 retail auto mortgage loan asset-backed...
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Total Issuing Amount: RMB 3,370,000,000.00
Chang Ying 2020-2 Retail Auto Mortgage Loan Asset-Backed Securities
Tianjin Great Wall Binyin Automotive
Finance Company, Limited
China Foreign Economy and Trade Trust
Co., Ltd.
Settlor/Originator/Servicer Trustee/Issuer
Principal Amount
(RMB Yuan)
Percentage of
Initial Pool
Balance
Percentage of
Total Issuing
Amount
Credit Rating
(CBR/CCXI)
Coupon
Type
Principal
Repayment
Payment
Frequency
Expected
Maturity
Date
Class A1 Notes 1,400,000,000.00 40.25% 41.5430% AAAsf/AAAsf Fixed Scheduled
Amortization Monthly 2021/5/26
Class A2 Notes 1,580,000,000.00 45.42% 46.8843% AAAsf/AAAsf Fixed Pass-through Monthly 2021/10/26
Subordinated Notes 390,000,000.00 11.21% 11.5727% - - Pass-through Monthly 2023/4/26
Total Issuing
Amount 3,370,000,000.00 96.88% 100.00% - - - -
-
Over-
collateralization 108,618,713.98 3.12% - - - - - -
Total 3,478,618,713.98 100.00% - - - - - -
The Trustee will issue Senior Notes and Subordinated Notes, the Final Maturity
Date of which is April 26, 2026, and remit to the Originator the Net Subscription
Amount of the Senior Notes. All Subordinated Notes will be held by the Originator.
China Merchants Securities Co., Ltd. is responsible for leading the work of
bookbuilding and will set up dedicated bookbuilding room for conducting bookbuilding,
the address of which is the Bookbuilding Room, 17F, China Merchants Bank Tower,
No.3 Building, No.1 Yard, Yuetan South Street, Xicheng District, Beijing.
Investing in the Notes may involve various risks. Please refer to the Investment
Risk Alert under Chapter One of this Offering Circular.
Calculation of interests on the Notes starts on (and including) the Trust Effective
Date. On each Payment Date, the Trustee will pay the investors the corresponding
principal and interests. The first Payment Date of the Notes will be August 26, 2020,
but if such day is not a Business Day, the Payment Date will be the immediately
following Business Day. About the coupon rate on the Notes, please refer to the Basic
Information of the Notes under Chapter Five of this Offering Circular.
China Central Depository & Clearing Co., Ltd. will credit the Notes into the
Noteholders’ custody account no later than the first Business Day immediately
following the Trust Effective Date. Subject to relevant regulations, the Trustee shall
fulfill the related procedures for trading and circulation with the National Inter-bank
Funding Center after the issuance, to realize the trading and circulation of the Senior
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Notes. The Subordinated Notes shall not be traded or transferred.
The Underlying Assets of Chang Ying 2020-2 Retail Auto Mortgage Loan
Securitization Trust are retail auto mortgage loans. For the general information of the
Underlying Assets, please refer to General Information of Underlying Assets under
Chapter Three of this Offering Circular.
China Bond Rating Co., Ltd. and China Chengxin International Credit Rating Co.,
Ltd. provided rating services for this transaction. For the ratings of the Senior Notes by
China Bond Rating Co., Ltd. and China Chengxin International Credit Rating Co., Ltd.,
please refer to Chapter Six Section III of this Offering Circular.
For offshore investors participating in the subscription of the securities through
the “Northbound Trading” channel of “Bond Connect”, the specific arrangements
concerning registration, custody, settlement, remittance and conversion of funds will
follow the “Interim Measures for the Connection and Cooperation between the
Mainland and the Hong Kong Bond Market” issued by the People’s Bank of China and
other relevant laws and regulations. “CCDC” provides services concerning registration,
custody and remittance for the offering of securities. Hong Kong Monetary Authority-
Central Money markets Unit (HKMA-CMU) provides the corresponding services for
offshore investors.
Investors should read this Offering Circular and other relevant information
disclosure documents carefully and make an independent investment decision before
purchasing the Notes. The acceptance of the filing of the issuance of the Notes by the
People’s Bank of China, China Banking and Insurance Regulatory Commission and
relevant authorities is not an evaluation by the authorities of the suitability of an
investment in the Notes or a judgment on the risks of an investment in the Notes.
This English translation of this Offering Circular is for the convenience of certain
investors only. The official Offering Circular is in Chinese, and investors are only
entitled to rely on the official Offering Circular in Chinese. If there are differences
between the Offering Circular in Chinese and this English translation of the Offering
Circular, the Offering Circular in Chinese will prevail.
The publish date of this Offering Circular is July 2, 2020.
I
IMPORTANT NOTICE
Chang Ying 2020-2 Retail Auto Mortgage Loan Asset-Backed Securities (the
“Notes”) are being issued with the confirmation of Department of Innovation and
Supervision of China Banking and Insurance Regulatory Commission, by Filing
Confirmation on the Chang Ying 2020-2 Retail Auto Mortgage Loan Securitization
Product and by People's Bank of China’s Determination on Approval for Administrative
License (PBOC Market Access Administrative Permission [2019] No. 250).
The Notes are being issued based on the Report on Registration Application for
the Chang Ying Series Retail Auto Mortgage Loan Asset-Backed Securities published
on December 24, 2019, which is the second issuance of asset-backed securities within
the registered issuance quota for the Chang Ying Series Retail Auto Mortgage Loan
Asset-Backed Securities.
The Notes only represent the corresponding shares of Trust Beneficial Right in the
special purpose trust, and do not constitute indebtedness of the Originator, the Trustee,
the Lead Underwriter or any other institution to the investors. The investors’ right to
recourse under the Notes is limited to the Trust Property only. Other than the duties
borne under the Trust Agreement and the Servicing Agreement as the Settlor and the
Servicer, as applicable, the Originator will not bear any obligations or responsibilities
for other losses occurred during the credit assets securitization. The Trustee assumes
the obligations of payment of the principal and interest on the Notes to the investors
within the limit of the Trust Property only.
The Originator does not provide any explicit or implicit guarantee for the Notes.
The Notes do not constitute indebtedness of the Originator to the investor.
Investors should carefully read this Offering Circular and the other relevant
information disclosure documents and make independent investment decisions before
purchasing the Notes. The approval or registration of the issuance of the Notes by the
relevant authorities does not constitute evaluation by the authorities on the value of an
investment in the Notes, nor does it indicate a judgment on the risks of an investment
in the Notes.
The Issuer confirms that as of the date recorded on the cover of this Offering
Circular, this Offering Circular does not contain any false record, misleading statement,
or major omission.
The summary of the credit rating report, legal opinion, accounting opinion, tax
opinion and other opinions of intermediaries has been verified by the intermediaries,
and the Issuer will guarantee the authenticity and accuracy of the quotation.
II
TABLE OF CONTENT
Chapter 1 Investment Risk Alert ....................................................................................................... 1
1. Risks Relating to the Limited Recourse .................................................................... 1
2. Risk Relating to the Asset Pool ................................................................................. 1
3. Risks Relating to the Transaction Structure .............................................................. 4
4. Concentration Risks .................................................................................................. 4
5. Interest Rate Risks ..................................................................................................... 4
6. Liquidity Risks .......................................................................................................... 5
7. Risks relating to Change of Laws ............................................................................. 5
8. Legal Risks ................................................................................................................ 5
9. Operational Risk ........................................................................................................ 5
10. Risks relating to Default of or Material Adverse Change to the Other Parties to the
Transaction ................................................................................................................................ 6
11. Risks relating to the Change of Cash Flow Distribution Order of Priority after the
Occurrence of an Event of Default ............................................................................................ 6
12. Risks Relating to Credit Rating ................................................................................. 7
13. Risks Relating to the Limited Experience of the Originator ..................................... 7
Chapter 2 Transaction Structure ........................................................................................................ 8
1. Transaction Structure Diagram ................................................................................. 8
2. Brief Introduction to the Participating Institutions .................................................... 9
3. Declarations of Affiliation among Transaction Parties ........................................... 27
4. Rights and Obligations of the Participants .............................................................. 27
5. Distribution of Collections ...................................................................................... 32
6. Credit Enhancement Measures ................................................................................ 41
7. Meeting of Noteholders ........................................................................................... 45
8. Cash Flow Table ...................................................................................................... 50
Chapter 3 General Information of the Underlying Assets ............................................................... 52
1. Eligibility Criteria ................................................................................................... 52
2. Number of Loans and Loan Amount ....................................................................... 54
3. Loan Term ............................................................................................................... 55
4. Loan Interest............................................................................................................ 55
5. Concentration .......................................................................................................... 55
6. Mortgage Vehicles ................................................................................................... 56
7. Borrowers ................................................................................................................ 56
8. Purpose of Loans ..................................................................................................... 56
Chapter 4 Distribution Information of the Asset Pool ..................................................................... 58
1. Statistics of the Asset Pool ...................................................................................... 58
2. Statistics of Borrowers ............................................................................................ 65
3. Statistics of the Mortgage Vehicle ........................................................................... 72
Chapter 5 Basic Information of the Notes ....................................................................................... 74
1. Expenses .................................................................................................................. 74
2. Schedule .................................................................................................................. 74
3. Key Terms of Notes ................................................................................................. 77
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4. Risk Retention ......................................................................................................... 85
5. Method of Offering ................................................................................................. 85
6. Sensitivity Analysis ................................................................................................. 86
Chapter 6 Opinions of Intermediaries ............................................................................................. 88
1. Summary of Legal Due Diligence Opinions and Legal Opinions ........................... 88
2. Summary of Transactions, Accounting Opinions and Tax Opinions ....................... 97
3. Summary of Credit Ratings Assumption and Analysis ......................................... 104
Chapter 7 Subsequent Arrangement of the Notes ......................................................................... 110
1. Arrangement of Monitoring Ratings ..................................................................... 110
2. Arrangement of Information Disclosure ............................................................... 111
Chapter 8 Issuance, Underwriting, Registration, Custody, Trading, Settlement and Treatment for
Unsuccessful Issuance ................................................................................................................... 114
1. Issuance of the Notes ............................................................................................ 114
2. Underwriting of the Notes ..................................................................................... 114
3. Registration and Custody of the Notes .................................................................. 114
4. Trading of the Notes .............................................................................................. 115
5. Settlement of the Notes ......................................................................................... 115
6. Form and Means for the Beneficiary Acquiring the Trust Benefit ........................ 115
7. Treatment for Unsuccessful Issuance of the Notes ............................................... 115
Chapter 9 Accounting and Management of Trust Property ........................................................... 117
1. Accounting of Trust Property ................................................................................ 117
2. Management of the Asset Pool .............................................................................. 117
3. Custody of the Monetary Trust Property ............................................................... 117
4. Termination and Liquidation of the Trust .............................................................. 118
Chapter 10 Important Documents and Conditions for the Transfer of Trust Property .................. 120
Chapter 11 Influence of PRC Laws ............................................................................................... 122
Chapter 12 Definition Schedule .................................................................................................... 133
IV
RETAIL AUTO MORTGAGE LOAN ASSET-BACKED SECURITY
INFORMATION DISCLOSURE FORM SYSTEM CHECKLIST
Reference
number Description
Page in the Offering
Circular
F-0 Cover Page, Table of Contents, Basic Information Cover Page
F-0-1 Transaction Parties Cover Page
F-0-2 Overview of the Notes Title Page
F-0-3 Table of Contents Page III-IV
F-0-4 Important Information Page II
F-1 Investment Risk Alert Page 1-7
F-2 Notes Structure Page 8-51
F-2-1 Diagrams of the Notes Structure Page 8
F-2-2 Description of the Transaction Parties Page 8-27
F-2-3 Rights and Obligations of the Participants Page 27-32
F-2-4 Distribution of Collections Page 32-41
F-2-5 Credit Enhancement Measures Page 41-45
F-2-6 Meeting of Noteholders Page 45-50
F-2-7 Pool Cash Flow Table Page 50-51
F-3 General Information of the Underlying Assets Page 52-56
F-3-1 Composition of the Asset Pool -Number of Loans
and Loan Amount Page 54-55
F-3-2 Composition of the Asset Pool - Loan Term Page 55
F-3-3 Composition of the Asset Pool - Loan Interest Page 55
F-3-4 Composition of the Asset Pool - Mortgage Vehicles Page 56
F-3-5 Composition of the Asset Pool - Borrowers Page 56
F-4 Distribution of the Mortgage Loans in the Asset Pool Page 58-73
F-4-1 Statistics of the Asset Pool Page 58-64
F-4-2 Statistics of Borrowers Page 65-71
F-4-3 Statistics of the Mortgage Vehicle Page 72-73
F-5 Basic Information of the Notes Page 74-87
F-5-1 Expenses Page 74
F-5-2 Schedule Page 74-77
F-5-3 Key Terms of the Notes Page 77-85
F-5-4 Risk Retention Page 85
F-6 Opinions of Intermediaries Page 88-109
F-6-1 Summary of Legal Opinions Page 92-97
F-6-2 Summary of Transaction and Summary of
Accounting Opinions Page 97-104
F-6-3 Summary of Credit Ratings Assumption and Analysis Page 104-109
V
F-7 Subsequent Arrangement of the Notes Page 110-113
F-7-1 Arrangement of Monitoring Ratings Page 110
F-7-2 Arrangement of Information Disclosure Page 111-113
Note: The Retail Auto Mortgage Loan Asset-Backed Security Information Disclosure Form System
or Form System refers to the annex of the Guidelines on Information Disclosure of Retail Auto Mortgage Loan Asset-Backed Securities (Trial) promulgated by NAFMII.
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Chapter 1 Investment Risk Alert
Investors should carefully read this Offering Circular and other relevant
information disclosure documents, and make an independent investment decision
before purchasing the Notes. The approval or registration of the issuance of the Notes
by the relevant authorities does not constitute evaluation by the authorities on the value
of an investment in the Notes, nor does it indicate a judgment on the risks of an
investment in the Notes.
Some of the potential risks in asset-backed securities investments are summarized
as following. Each may have Material Adverse Effect on the investment of some or all
of the Noteholders. Therefore, investors shall be particularly careful to consider the
following risk factors when evaluate and purchase the Notes.
1. Risks Relating to the Limited Recourse
The Notes only represent the corresponding shares of the Trust Beneficial Right
in the special purpose trust and does not constitute indebtedness of the Originator,
Trustee or any other institutions to the investors. The investors’ right to recourse under
the Notes is limited to the Trust Property only. The Trustee’s obligation to pay the
principal and income on the Notes to the investors is limited to the Trust Property only.
For such risks, according to the Transaction Documents, the Trustee, the
Originator, the Servicer, the Fund Custodian, and other entities shall fulfil their rights
and obligations, which to some extent insures the recourse against the corresponding
entities to compensate the losses incurred by the Trust Property due to the breaches or
misconducts by such entities. Therefore the investors’ limited recourse to the Trust
Property does not cause the losses incurred by the Trust Property to be borne solely by
the investors under any circumstance.
2. Risk Relating to the Asset Pool
The Trust Property consists of every Mortgage Loan and the relating Security
Rights and Interest entrusted to the Trustee for the creation of the Trust by the Originator.
Therein, with regards to the Mortgage Loan:
(A) Credit Risks
Credit risk refers to the risk of losses incurred by the investors due to the failure or
delay in payments of the principal and interest of the Notes. The principal and returns
of the Notes depends solely on the principal and interest collections from the Mortgage
Loans in the Asset Pool and the corresponding credit enhancement arrangements,
therefor the credit risk of the Mortgage Loans is the primary cause of the credit risk of
the Notes. Specifically, the Borrowers of Mortgage Loans may delay of fail in payment
of the due principal and interest for subjective or objective reasons, resulting in the
delay or failure in the payment of principal and returns on the Notes and thus causing
losses.
For such risks, the following risk control mechanisms are employed: 1. to establish
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Eligibility Criteria for the Mortgage Loans entering into the Asset Pool, and within the
Trust Duration, if any Ineligible Asset is identified, and the Originator fails to cure it
materially within 30 day after notice of circumstances, the Originator is obligated to
repurchase such Ineligible Asset at the Repurchase Price upon the request of the Trustee;
2. to an extent, the possibility of an default on the Mortgage Loan is lowered and the
losses incurred from such default is mitigated by the stringent pre-loan approval
procedures, the thorough post-loan management procedures, and the effective loan
collection procedures of the Originator; 3. each Mortgage Loan in the Asset Pool is
secured by the Mortgage Right granted in the Mortgage Vehicle, which to an extent
lowered the possibility for the Borrower to default; 4. internal credit enhancement is
employed by tranching the Notes, where the investors of the Subordinated Notes will
provide credit protections for the investors of the Senior Notes; 5. authoritative and
creditable credit rating agencies are engaged to rate the Notes, so as to assist the
investors to form correct judgment regarding the risks.
(B) Risks Resulted from the Failure to File Registration of Change in Mortgages
Due to the high cost to file for registration of change in mortgage for each Mortgage
Loan in the Asset Pool secured by the Mortgage Vehicles, the Originator and the Trustee
agrees to withhold the registration of change filing. If a Mortgage Loan is in default
and enforcement of the Mortgage Right is called for, such Mortgage Right may not be
enforceable against a bona fide third party due to lack of registration of change, which
eventually leads to risks for the investors.
For such risks, the following risk control mechanisms are employed: 1. according
to the Property Law of the People’s Republic of China, withholding the registration of
change in mortgage filing does not affect the legality and the effectiveness of the de
facto transfer of Mortgage Right after the entrustment of the Asset Pool (including the
Mortgage Right) by the Originator to the Trustee, only that the Trustee’s Mortgage
Right cannot be enforced over a bona fide third party; 2. the Trust Agreement stipulates
that, it is one of its obligations as the Servicer for the Originator to continue to be
registered as the nominal mortgagee with the appropriate registration authorities of the
Government Authorities, and, as the Servicer acting on behalf of the Trustee, to hold
the original automobile registration certificate where the Originator is registered as the
mortgagee; 3. a Mortgage Loan in the Asset Pool shall be repurchased by the Originator
if a registration of change in relation with such Mortgage Loan is not filed by the
Servicer pursuant to the Trust Agreement when a bona fide third party claims mortgage
right or ownership against the underlying Mortgage Vehicle, and the Mortgage Right
held by the Trustee cannot be enforced over such bona fide third party.
(C) Risks relating to the Depreciation of Mortgage Vehicles
The Trust Property includes the Mortgage Right granted in the Mortgage Vehicles
under each Mortgage Loan, therefore risks may arise from the depreciation of Mortgage
Vehicles caused by the depreciation of such Mortgage Vehicle and possible decrease of
automobile price in the future.
No special risk control mechanism is employer to control such risks in the
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transaction, but the Notes are divided into tranches so that internal credit enhancement
is achieved by the credit protection provided by the over-collateralization of the Asset
Pool and investors in the Subordinated Notes to the investors in the Senior Notes,
wherein the Subordinated Notes will bear the risk of loss before the Senior Notes if the
depreciation of Mortgage Vehicles affects the Collections and the distribution of cash
flow.
(D) Risks relating to Prepayment
Because of the unpredictability of the prepayment of principal and interest by the
Borrowers, such prepayment may cause the actual maturity and weighted average
maturity to be shorter than the expected maturity and weighted average maturity,
resulting in the reinvestment risks for the investors.
To control the risks relating to prepayment, the following measures are adopted in
the transaction: on the one hand, the Mortgage Loan Agreement stipulates that the
Trustee has the right to charge 3% of the outstanding principal balance as liquidated
damages, and to request the outstanding principal balance to be repaid at once if the
Borrower prepays its principal and interest on the Mortgage Loan, so as to lower the
possibilities of the Borrower’s prepayment of principal and interest on the Mortgage
Loan. Projected based on the historical statistics from the Originator, percentage of
borrowers prepaying principal and interest on the Mortgage Loan is low; on the other
hand, during the process of designing the Notes, statistical and mathematical models
were used to analyze the historical data and estimate the future cash flow, so as to
complete the structured design of the Notes, and the quantitative information relating
to the prepayment risks are disclose in this Offering Circular; in the same time, the
Asset Pool of this transaction is strictly selected according to the Eligibility Criteria,
and most of selected assets are loans with subsidies on interest. Due to the weighted
average annual interest rate of the Asset Pool is only 2.26%, the Borrowers’ willingness
to prepay the loan is relatively low, which can control the prepayment proportion
effectively.
(E) Risks Relating to Withholding Changing the Beneficiary of the Security Right
and Interest
Because of the numerous transactional parties and other entities in this transaction,
and the complexity of the transaction structure, delay or loss in the payment of principal
and interest on the Notes may be caused by the default, due to subjective or objective
reasons, of any of such transactional parties and other entities. Such risks include:
misconduct or default by the Trustee, the Servicer, or the Fund Custodian, and the
operational risks of the Servicer.
For such risks, the following risk control mechanisms will be employed in this
transaction: 1. the rights and obligations of the transaction parties are explicitly
stipulated in the Transaction Documents, as well as the responsibility and compensation
for the damages incurred from the misconduct or default of the transaction parties; 2.
the Loan Servicing Manual stipulated the operation of the Servicer in detail, thus
reducing the operational risks of the Servicer; 3. the Trustee will disclose information
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with strict compliance with the laws, regulations, and policies.
3. Risks Relating to the Transaction Structure
Because of the numerous transactional parties and other entities in this transaction,
and the complexity of the transaction structure, delay or loss in the payment of principal
and interest on the Notes may be caused by the default, due to subjective or objective
reasons, of any of such transactional parties and other entities. Such risks include:
misconduct or default by the Trustee, the Servicer, or the Fund Custodian, and the
operational risks of the Servicer.
For such risks, the following risk control mechanisms will be employed in this
transaction: 1. the rights and obligations of the transaction parties are explicitly
stipulated in the Transaction Documents, as well as the responsibility and compensation
for the damages incurred from the misconduct or default of the transaction parties; 2.
the Loan Servicing Manual stipulated the operation of the Servicer in detail, thus
reducing the operational risks of the Servicer; 3. the Trustee will disclose information
with strict compliance with the laws, regulations, and policies.
4. Concentration Risks
Concentration risk refers to the concentration of Mortgage Loans in Asset Pool on
some aspects such as Borrowers’ type, geographical area, vehicles brand, loan amount,
loan type and other economic factors.
There are 69,512 Mortgage Loans in the Asset Pool, coming from 69,507 different
Borrowers. The corresponding Borrowers of the Mortgage Loans are all individuals;
geographically, the Mortgage Loans are originated in tens of provinces, autonomous
regions and municipalities directly under the central government over the country.
There is a high level of dispersion regarding to the Borrowers and the property of the
Mortgage Loans, therefore concentration risk is relatively low.
All the Mortgage Vehicles involved in the pooled Mortgage Loans are the vehicles
produced by Great Wall Motor Company Limited, of which the brand and type are
relatively concentrated, if any brand and reputation risk or any event of recalling certain
type of vehicle occurs, there may be negative influence on the valuation and liquidation
of the Mortgage Vehicles. However, due to the long-term good reputation of the Great
Wall Motor Company Limited and the dispersion of the brand and type of the mortgage
vehicles when selecting the pooled assets, such concentration risk regarding to the
vehicle brand and type could be mitigated.
5. Interest Rate Risks
The price of the outstanding Notes will be affected by the interest rate. There is
the uncertainty of fluctuation in the interest rate on the market, affected by the national
economy and macro policies of the state, causing the risk of the Notes price fluctuation
for the investors.
For such risks, the following risk control mechanisms will be employed in this
transaction: the securitization product described herein will fully disclose the interest
rate risks of the Notes to the investors; such investors shall formulate the investment
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decisions according to its own need based on its analysis of the market trend, and lower
the possibilities of loss with interest rate risk management methods.
6. Liquidity Risks
The Senior Notes that meet the trading and circulation requirements will be
circulated on the National Inter-Bank Bond Market. Since the securitization products
are still innovative financial products in the PRC, there is a comparatively limited
volume for such products, and the investors are not yet familiar with such products,
resulting in a degree of liquidity risk during resale, where the securities may not be able
to be liquidated because of hardship of finding counterparties.
Such risks will be mitigated under this transaction by following measures: 1. the
Senior Notes in this transaction has a comparatively short weighted average maturity,
and is estimated to have better liquidity; 2. as the market develops, the volume of the
securitization products will be increased, and the platform for trading such products
will be diversified, along with the open-up of repurchase transactions and other
development, all of which could improve the liquidity of the securitization products.
7. Risks relating to Change of Laws
The Laws relating to securitization may be subject to changes in the future, and
causing results including increase in the taxes borne by the investors, which constitutes
risks for the investors’ investment in the Notes.
For such risks, considering that the underlying Asset Pool of the Notes has a
comparatively short weighted average remaining term of 20.92 months, in the
comparatively foreseeable duration of the Notes, possibilities of the change of law and
the adverse influence caused thereby to the investors are comparatively low.
8. Legal Risks
Legal risk refers the risk of unenforceability of the agreements caused by the
misunderstanding of the terms by the relevant parties, lack of enforcement mechanisms,
and ambiguity of the terms, as well as the risk caused by litigation, adverse judgment,
etc. Legal risk covers all stages in the execution and performance of the agreements,
including the dispute resolution process.
For such risks, the following measures are employed in this transaction: Beijing
Zhong Lun Law Firm is employed as the legal counsel in this transaction to review all
the Transaction Documents and issue legal opinion and legal due diligence report.
9. Operational Risk
Operational risk refers to the risk of loss caused by the inappropriate or failing
internal procedures, personnel, and system of the transaction parties, or caused by
external incidents, which includes internal procedural risk, institutional risk, liquidation
risk, IT system risk, personnel risk, and external incident risk. Operational risk could
originate from the internal risk management of the investors, or from the intermediaries
engaged for the purpose of the securitization.
For such risks, the following risk control mechanisms will be employed in this
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transaction: 1. to stringently construct the rights and obligations of the transaction
parties, so as to ensure the legality, completeness, and the rigorousness of the
agreements executed between the transaction parties; 2. to strictly comply with the laws,
regulation and policies in the disclosure of information, and refrain from under-the-
table operations; 3. to fully disclose the information in the Offering Circular; 4. for the
Trustee to publish Trustee Report on a regular basis, and to publish material incidents
that could affect the interest of the investors from time to time, so as to increase the
operation transparency of the securitization; 5. to engage the Rating Agencies to
perform the initial rating and the tracking rating during the duration of the Notes.
10. Risks relating to Default of or Material Adverse Change to the Other Parties
to the Transaction
The transaction involves many parties, though the related Transaction Documents
have stipulated the rights and obligations of each party to the transaction in detail, the
Issuer cannot exclude the risk of loss of benefits of the investors caused by the Default
of or Material Adverse Change that occurred to any party.
For such risks, the following risk control mechanisms will be employed in the
transaction structure: termination events and successor appointment mechanisms for
the principal parties to the transaction, including the Servicer in this transaction. For
example, if any Servicer Termination Event occurs, the Trustee shall convene a Meeting
of Noteholders. If the Meeting of Noteholders decides to terminate the Servicer, the
Trustee shall then promptly send termination notice to the Servicer, and appoint a
Successor Servicer with the approval from Meeting of Noteholders pursuant to the
Servicing Agreement.
11. Risks relating to the Change of Cash Flow Distribution Order of Priority
after the Occurrence of an Event of Default
After the occurrence of the Event of Default, the Trustee will adjust the distribution
order of priority as follows: (1) the taxes and fees relating to the Trust to be paid by the
Trustee according to PRC Laws (including but not limited to value-added tax and
surcharges); the Trustee will credit the tax (if any) calculated according to relevant tax
formula relating to the Trust and other reasonable amount (if any) estimated by the
Trustee to the Tax Reserve Account; (2) transfer, in the same priority and pro rata to the
payable amount, the Service Fees of the Trustee, the Fund Custodian, the Paying Agent,
the Rating Agencies (if any), the Auditor (if any), and the Back-up Servicer (if any), as
well as the Reimbursable Expenses of the aforementioned entities and of the Servicer
to the Expense Account; (3) If the Event of Default is not caused by the Servicer directly
or indirectly, transfer all the Service Fees shall be paid to the Servicer to the Expense
Account; (4) transfer the accumulatively accrued but unpaid interest payable on the
Class A1 Notes and the Class A2 Notes as on the first Payment Date after such Trust
Distribution Date to the Notes Payment Account; (5) Transfer a certain amount to the
Notes Payment Account, until the amount is equal to the sum of Outstanding Principal
Balance of the Class A1 Notes and the Class A2 Notes as on such Trust Distribution
7
Date; (6) If such Event of Default is caused by the Servicer directly or indirectly,
transfer all the Service Fees shall be paid to the Servicer to the Payment Account; (7)
Transfer a certain amount to the Notes Payment Account, until the amount is equal to
the Outstanding Principal Balance of all the Subordinated Notes as on such Trust
Distribution Date; (8) All the remaining funds shall be transferred to the Notes Payment
Account as returns on the Subordinated Notes. Before the Meeting of Noteholders
confirms whether or not such Event of Default is caused by the Servicer, the Trustee
shall distribute in the order of priority as if such Event of Default is not caused by the
Servicer.
Therefore, after the Event of Default, the Subordinated Notes will suffer the lose
first, followed by Senior Notes.
12. Risks Relating to Credit Rating
Ratings of the Notes from the Rating Agencies are not advices to buy, sell of hold
the Notes, and there is no assurance that the ratings of the Notes will stay at the current
grade, where the Rating Agencies may withdraw or downgrade the ratings of Notes
depending on specific circumstances in the future. The withdrawal and downgrade of
ratings of the Notes by the Rating Agencies may bring negative affects to the value of
the Notes.
13. Risks Relating to the Limited Experience of the Originator
By now, the Originator Tianjin Great Wall Binyin Automotive Finance Company
Ltd. has only launched four asset securitization products, Chang Ying 2019-1 Retail
Auto Mortgage Loan Asset-backed Securities, Chang Ying 2019-2 Retail Auto
Mortgage Loan Asset-backed Securities, Chang Ying 2019-3 Retail Auto Mortgage
Loan Asset-backed Securities and Chang Ying 2020-1 Retail Auto Mortgage Loan
Asset-backed Securities, whose asset securitization experience is limited. TGBAFC has
undertaken the auto financing business officially since from 2014, whick is a relatively
short term, therefore the historical performance term of the static pool is short, and the
number of available static pool is less, there is risks relating to inadequate exposure of
default risks.
8
Chapter 2 Transaction Structure
1. Transaction Structure Diagram
The following diagram shows the basic transaction structure of this issuance of Notes. Solid
lines indicate the legal relationship between the parties and dotted lines show the cash flow transfers:
The specific transaction process is as follows:
According to the Trust Agreement, TGBAFC, as the Originator, entrusts
corresponding Mortgage Loans and the related Security Right and Interest to the
Trustee, FOTIC, to establish the Trust. The Trustee will issue the Notes collateralized
by the Trust Property and pay the subscription amount after deducting the Issuance
Expenses to the Originator.
The Trustee issues the Notes to investors, and pays the relevant Taxes, Trust
Expenditures as well as principal and interest of the Notes within the limitation of cash
flows generated from the Trust Property. The Notes consist of Senior Notes and
Subordinated Notes.
According to the Underwriting Agreement and the Underwriting Syndicate
Agreement, the Trustee engages the Lead Underwriters to underwrite the Senior Notes.
The Lead Underwriter and the Joint Lead Underwriters will organize an Underwriting
Entrust the Mortgage Loan
Assets
TGBAFC
(Originator)
Borrower
TGBAFC
(Servicer)
ICBC Tianjin Branch
(Fund Custodian)
FOTIC
(Trustee/Issuer)
CMS
/ICBC/Mizuho China
(Principal Underwriters)
Investors
Special Purpose Trust
Underwriting
Syndicate
CCDC
(Notes Custodian/Paying Agent)
Trust Agreement Issuance
Proceeds Establish
Trust
Loan
Origination
Loan Repayment
Transfer the
Collection
Transfer Principal
and Interest of Notes
Principal and
Interest payment
on Notes
Servicing
Agreement
Fund Custodian Agreement
Underwriting
Syndicate
Agreement
Underwriting Agreeent
Issue
Notes
Issuance
Proceeds
Underwrite
Notes
Subscription
Proceeds
9
Syndicate to underwrite the Senior Notes. All the Subordinated Notes will be held by
the Originator.
According to the Service Agreement, the Trustee engages the Servicer to perform
management and service for the daily collection of the Asset Pool.
According to the Fund Custody Agreement, the Trustee engages the Fund
Custodian to provide fund custody service regarding the cash flows generated from the
Trust Property.
According to the Bond Issuance, Registration and Agency Payment Agreement,
the Trustee engages the CCDC to provide note registration, custody and the principal
and interest agency payment services in relation to the Notes.
The Trustee will arrange Senior Notes to be traded in the China's Inter-Bank Bond
Market or other trading venues permitted by regulators. The Subordinated Notes will
not be transferred or traded.
The Originator and the Trustee agree that CMS, as the Lead Underwriter of this
Notes and on behalf of the Noteholders, engages CBR to provide credit rating service
for this Notes.
2. Brief Introduction to the Participating Institutions
A. Settlor, Originator and Servicer：Tianjin Great Wall Binyin Automotive
Finance Company Ltd.
(A) General Information
As the end of 2019, Tianjin Great Wall Binyin Automotive Finance Company
Ltd.’s (hereinafter referred to as “TGBAFC”) Basic Information is as follows:
Chinese Name 天津长城滨银汽车金融有限公司
English Name Tianjin Great Wall Binyin Automotive Finance Company Ltd.
Legal Representative
Fengzhen LI(李凤珍)
Registered Capital RMB 2.1 billion
Registered Address
F09, C3 Building, MSD-C Zone, 79 First Street, Tianjin
Economic-Technological Development Area, Tianjin,
People’s Republic of China
Contacts Weimin TANG(唐伟民), Hao DONG(董浩), Feilong
ZHANG(张飞龙)
Tel 022-65276899, 022-65276883, 022-65276896
Zip Code 300457
10
Website http://www.gwmfc.com
(B) History
TGBAFC, officially established on May 30, 2014, is one of the auto finance
companies approved to establish by CBIRC, and was invested by Great Wall Motor
Company Limited and Tianjin Binhai Rural Commercial Bank Co., Ltd.
August 2, 2013, CBIRC issued Official Reply of CBRC on Establishment of Auto
Finance Company by Great Wall Motor Company Limited (No. Yinjianfu [2013] 407),
approving Great Wall Motor Company Limited to establish the auto finance company,
and required GWM to finish the establishment in six months after received the official
reply.
December 5, 2013, Deloitte Touche Tohmatsu Certified Public Accountants LLP
(special general partnership) Tianjin office issued the Capital Verification Report (No.
Deqinbao [Yan] Zi [13] Di 0796) for TGBAFC, confirming that as of December 5, 2013,
TGBAFC (establishing) had received all of registered capital of RMB 550 million in
cash.
May 9, 2014, Tianjin Bureau of China Banking and Insurance Regulatory
Commission issued the Official Reply of Tianjin Bureau of CBRC on the Business
Commencement of Tianjin Great Wall Binyin Automotive Finance Company, Limited
(No. Jinyinjianfu [2014] 178), approving that TGBAFC’s company name in Chinese as
well as English and the business address; TGBAFC’s registered capital of RMB 550
million; the qualification of TGBAFC’s senior managers; and TGBAFC’s business.
May 13, 2014, TGBAFC obtained the People’s Republic of China Financial
License numbered N0016H212000001, issued by CBIRC. TGBAFC now holds the
People’s Republic of China Financial License numbered N0016H212000001, issued by
CBIRC on February 1, 2019.
May 30, 2014, TGBAFC obtained the Business License with the registry number
of 120116000253723 issued by the State Administration for Industry and Commerce.
TGBAFC officially started business on May 30, 2014. TGBAFC now holds the
Business License with the unified social credit code of 911201163003202179 issued by
the State Administration for Industry and Commerce on March 4, 2019.
May 16, 2017, Tianjin Bureau of CBIRC issued the Official Reply of Tianjin
Bureau of CBRC on the Change of Registered Address of Tianjin Great Wall Binyin
Automotive Finance Company, Limited (No. Jinyinjianfu [2017] 112), approving
TGBAFC to change its registered address at Room 8401, 8F, 19 Xinhuan West Road,
Binhai New Area, Tianjin to Unit 01, 03, 04, 05, 06, F09, C3 Building, MSD-C Zone,
79 First Street, Tianjin Economic-Technological Development Area, Tianjin.
December 25, 2017, Tianjin Bureau of CBIRC issued the Official Reply of Tianjin
Bureau of CBRC on the Increase of Registered Capital of Tianjin Great Wall Binyin
11
Automotive Finance Company, Limited (No. Jinyinjianfu [2017] 348), approving
TGBAFC to increase its registered capital of RMB 550 million to RMB 120 million.
December 26, 2017, Deloitte Touche Tohmatsu Certified Public Accountants LLP
(special general partnership) Tianjin office issued the Capital Verification Report (No.
Deshijinbao [Yan] Zi [17] Di 00003) for TGBAFC, confirming that as of December 26,
2017, TGBAFC had received the increased registered capital (paid-in capital) of RMB
650,000,000.00 in total from its shareholders Great Wall Motor Co., Ltd. and Tianjin
Binhai Rural Commercial Bank Co., Ltd. Both of its shareholders paid the increased
registered capital of RMB 650,000,000.00 in cash. The registered capital after increase
is RMB 1,200,000,000, and the paid-in capital is RMB 1,200,000,000.00.
October 15, 2018, Tianjin Bureau of CBIRC issued the Official Reply of Tianjin
Bureau of CBRC on the Qualification of Fengzhen LI (No. Jinyinjianfu [2018] 256),
approving the qualification of Fengzhen LI as the chairman of the board of director of
TGBAFC.
January 24, 2019, Tianjin Bureau of CBIRC issued the Official Reply of Tianjin
Bureau of CBIRC on the Change of Registered Address of Tianjin Great Wall Binyin
Automotive Finance Company, Limited (No. Jinyinbaojianfu [2019] 31), approving
TGBAFC to change its registered address at Unit 01, 03, 04, 05, 06, F09, C3 Building,
MSD-C Zone, 79 First Street, Tianjin Economic-Technological Development Area,
Tianjin to F09, C3 Building, MSD-C Zone, 79 First Street, Tianjin Economic-
Technological Development Area, Tianjin.
July 12, 2019, Deloitte Touche Tohmatsu Certified Public Accountants LLP
(special general partnership) Tianjin office issued the Capital Verification Report (No.
Deshijinbao [Yan] Zi [19] Di 00001) for TGBAFC, confirming that as July 11, 2019,
TGBAFC had received increased registered capital (paid-in capital) of RMB
900,000,000.00 in total from its shareholders Great Wall Motor Co., Ltd. Its shareholder
paid the increased registered capital of RMB 900,000,000.00 in cash. The registered
capital after increase is RMB 2,100,000,000, and the paid-in capital is RMB
2,100,000,000.00.
(C) Business Situation
TGBAFC provides financial service for relevant brands of great wall vehicles in
China and devotes to providing comprehensive and professional finance products and
service for the massive auto consumers in China. Its retail auto loan business has made
great strides since from May, 2014 when it started. As the end of 2019, TGBAFC’s
channels have covered 31 provinces, autonomous regions and municipalities directly
under the central government over the country except for Hong Kong Special
Administrative Region, Macao Special Administrative Region, and Taiwan region. The
number of the its own brand business level 1 channels is 1,091, of the sub-outlets is
1,176, of the multi-brand channels is 111, of the used car business channels is 30. As
the end of 2019, the assets of TGBAFC is RMB 28.597 billion. All type loans balance
is RMB 27.667 billion, among which, the retail auto mortgage loans balance is RMB
12
27.656 billion, with an increase of 47.47% compared to that of the end of 2018. In terms
of the quality of the loans, as the end of 2019, in accordance with the Non-banking
Financial Institutions Asset Risk Five-category Classification Guidelines (Trial), the
balance of non-performing loans classfied as the last three classifications is RMB 36
million, and the retail auto loan non-performing ratio is 0.13%.
(D) Summary of Originator’s Financial Condition
As of the end of 2019, TGBAFC’s main financial indicators are as follows:
Unit: RMB thousand Yuan
Year of
2019/December 31,
2019
Year of
2018/December
31, 2018
Year of 2017/December
31, 2017
Total Assets 28,597,363.14 19,710,949.17 12,637,905.64
Owners’ Equity 3,329,963.07 1,770,405.55 1,364,727.37
Operating Revenue 1,471,652.96 942,111.70 491,215.66
Operating Profit 888,297.63 532,723.76 213,147.76
Total Profit 888,375.04 542,291.48 216,888.37
Net Profit 659,557.52 405,678.18 160,884.59
Main Regulatory Indicators of TGBAFC as of the end of 2019
December 31, 2019
Capital Adequacy Ratio1 15.54%
Core Capital Adequacy Ratio * 14.36%
Retail Auto Mortgage Loan NPL Ratio ** 0.13%
* 1 According to the Measures of Commercial Bank Capital Management, the capital adequacy ratio and
the Tier I capital adequacy ratio are new adequacy ratios in New Basel III.
2 Non-performing loans are computed according to the Non-banking Financial Institutions Asset Risk
Classification Guidelines (Trial) of the CBIRC.
Main Indicators of TGBAFC as of the end of 2019
Unit: RMB onw hunred billion Yuan, %
13
Year of
2019/December 31,
2019
Year of
2018/December 31,
2018
YoY
Total Assets 285.97 197.11 45.08%
All Type Loans 276.67 186.26 48.54%
Loan Loss Reserves 4.45 3.15 41.27%
NPL Ratio 0.13% 0.07% 82.25%
Capital Adequacy Ratio 15.54% 11.96% 29.93%
Total Liabilities 252.67 179.41 40.84%
Owner’s Equity 33.30 17.70 88.09%
Net Profit 6.60 4.06 62.58%
Core Tier-1 Capital
Adequacy Ratio 14.36% 10.77% 33.33%
Self-use Fixed Assets
Ratio 0.20% 0.47% -57.45%
(E) Declaration of Default Record
TGBAFC has maintained sound operating status since its establishment, and has
no record of material default.
B. Issuer/Trustee: China Foreign Economy and Trade Trust Co., Ltd.
(A) General
As of the end of 2019, China Foreign Economy and Trade Trust Co., Ltd.’s
(hereinafter reffered to as “FOTIC”) Basic Information is as follows:
Chinese Name 中国对外经济贸易信托有限公司
English Name China Foreign Economy and Trade Trust Co., Ltd.
Registered Capital RMB 8 billion
Registered Address F6, Middle Building, Chemsunny World Trade Centre, 28
Fuxingmen Nei Street, Xicheng District, Beijing
Legal Representative Lin YANG(杨林)
Contacts Hanyi LI(李汉艺), Wei CAO(曹魏), Hao WANG(王昊),
Lingyue KONG(孔伶月)
Tel 010-59568841, 010-59568749, 010-57392586, 010-
57392599
Fax 010-59568906
Postal Code 100031
14
Website http://www.fotic.com.cn
(B) History and Business Summary
China Foreign Economy and Trade Trust Co., Ltd. (hereinafter referred to as
“FOTIC”), was founded on September 30, 1987 by the approval by People’s Bank of
China, and officially opened on December 18 of the same year, formerly known as
China Foreign Economy and Trade Trust and Investment Co., Ltd. On December 31,
1994, the State Council approved FOTIC to join the China National Chemicals Import
and Export Corporation (renamed as China’s Sinochem Corporation in November 2003,
hereinafter referred to as “Sinochem Group”), and merged with the original Sinochem
Group Finance Company. In September 2002, FOTIC was re-registered by the approval
of People’s Bank of China, and obtained the License for Trust Institution, and became
a trust and investment company subject to the direct supervision of the China Banking
Regulatory Commission. The registered capital of FOTIC is RMB 8 billion, and its
shareholders are Sinochem Capital Co., Ltd. and Sinochem Finance Co., Ltd.,
respectively owning 97.26% and 2.74% of the shares. As of the end of 2019, the total
amount of entrusted assets managed by FOTIC is RMB 445.765 billion.
FOTIC’s main business includes fund trust; chattel trust; real estate trust; securities
trust; other property or property right trust; conducting investment fund business as the
sponsor of the investment fund or the fund management company; enterprise asset
reorganization, mergers and acquisitions and project financing, corporate financing,
financial advisor and other business; entrusted to conduct securities underwriting
business approved by relevant authorities of the State Council; conducting
intermediation, consulting, credit investigation and other business; custody and safe
boxes service; other business approved by laws and regulations or the China Banking
Regulatory Commission.
FOTIC is qualified to engage in stock index futures transactions, to be the IPO
inquiry object, to engage the inter-bank bond market transaction, to conduct the inter-
bank borrowing and lending on the inter-bank borrowing or lending market, to manage
the special-purpose trust property and issue the asset-backed securities, to conduct the
equity investment business with proprietary property, to conduct the entrusted overseas
wealth management business (QDII) and other innovative business, among which, the
qualification for being the trustee of the special purpose trust is obtained in 2006 (No.
Yinjianfu [2006] 422).
These years, FOTIC has continued to strengthen the product innovation, and has
already built the four plus one strategic business group consisting of service for four
fields, the bank, capital market, real economy and financing market, and its inherent
business, which involves asset securitization, MOM trust service, securities investment
trust, micro finance, wealth management, family trust, real estate trust, infrastructure
trust, private placement, fund, futures and other fields. The company has taken the lead
in coming out with the brand Wuxing Wealth • Wealth Management, focusing on provide
the high-net-worth clients with wealth management and value-added service, which is
15
the beginning of trust company wealth management. In recent years, the company has
continued to strengthen the product innovation, launch a lot of risk-controllable and
higher-yielding products and enrich the type and structure of the products. For now, the
company has built the product system covering different risk-return ratio and different
term structures, which is up to the investment needs of different high-end clients.
(C) Asset Securitization Business Development Status and Experience
As the end of 2006, FOTIC was qualified to be the trustee of the special-purpose
trust, then FOTIC has explored and prepared for a long term. Since from 2007, FOTIC
has issued and been entrusted to manage 40 asset securitization products, the total
issuance amount is more than RMB 100 billion. Besides, FOTIC has been included in
the trustee alternative library of ICBC, CMB, SPDB, EXIM Bank, Bank of Tianjin,
HXB, CMBC, and Bank of Dongguan. FOTIC has rich experience as the trustee, and
its main business includes but is not limited to:
In 2007, as the issuer and trustee, FOTIC issued Xing Yuan 2007-1 Credit Asset-
backed Securities with IB as the originator, of which the total amount is RMB 5.243
billion. In 2008, as the issuer and trustee, FOTIC issued Zhe Yuan 2008-1 Credit Asset-
backed Securities with CZB as the originator, of which the total amount is RMB 696.37
billion. In 2014, FOTIC successfully issued Kai Yuan 2014-2 Railway-Special Credit
Asset-backed Securities, with the total amount of RMB 6 billion; Feng Yuan 2014-1
Retail Auto Mortgage Loan Asset-backed Securities, with the total amount of RMB 800
million. In 2015, FOTIC successfully issued Zhe Yuan 2015-2 Credit Asset-backed
Securities, with the total amount of RMB 1.84 billion; Kai Yuan 2015-3 Credit Asset-
backed Securities, with the total amount of RMB 3.04 billion; Kai Yuan 2015-7 Credit
Asset-backed Securities, with the total amount of RMB 6.91 billion; Hao Yun 2015-1
Credit Asset-backed Securities, with the total amount of RMB 1.183 billion; Yan Yin
2015-1 Credit Asset-backed Securities, with the total amount of RMB 978 million. In
2016, FOTIC successfully issued Aotupia China 2016-1 Retail Auto Mortgage Loan
Asset-backed Securities, with the total amount of RMB 1.5 billion; Autopia China
2016-2 Retail Auto Mortgage Loan Asset-backed Securities, with the total amount of
RMB 3 billion; Gong Yuan 2016-1 Non-performing Asset-backed Securities, with the
total amount of RMB 1.077 billion; Gong Yuan 2016-2 Non-performing Asset-backed
Securities, with the total amount of RMB 351 million; Toyota Glory 2016 Phase I Retail
Auto Loan Credit Asset-backed Securities, with the total amout of RMB 3 billion;
Chong Yin 2016-2 Credit Asset-backed Securities, with the total amout of RMB 1.148
billion; Qi Fu 2016-1 Residential Mortgaged-backed Securities, with the amount of
RMB 9.089 billion. In 2017, FOTIC successfully issued Autopia China 2017-1 Retail
Auto Mortgage Loan Asset-backed Securities, with the total amount of RMB 3.499
billion; Toyota Glory 2017 Phase I Retail Auto Loan Credit Asset-backed Securities,
with the total amount of RMB 406 million; Wan Jin 2017-1 Leasing Asset-backed
Securities, with the amount of RMB 2.972 billion; Autopia China 2017-2 Retail Auto
Mortgage Loan Asset-backed Securities, with the total amount of RMB 3.5 billion; Wan
Jin 2017-2 Leasing Asset-backed Securities, with the amount of RMB 1.887 billion;
16
Gong Yuan 2017-6 Non-performing Asset-backed Securities, with the total amount of
RMB 510 million. In 2018, FOTIC successsfully issued Zhong Yu 2018-1 Non-
performing Asset-backed Securities, with the total amount of RMB 162 million; Gong
Yuan Zhi Cheng 2018-1 Non-performing Asset-backed Securities, with the total amount
of RMB 470 million; Silver Arrow China 2018-1 Retail Auto Mortgage Loan Asset-
backed Securities, with the total amount of RMB 8.431 billion; Gong Yuan Zhi Cheng
2018-5 Non-performing Asset-backed Securities, with the total amount of RMB 386
million; Silver Arrow China 2018-2 Retail Auto Mortgage Loan Asset-backed
Securities, with the total amount of RMB 8.423 billion. In 2019, FOTIC successfully
issued Chang Ying 2019-1 Retail Auto Mortgage Loan Asset-backed Securities, with
the amount of RMB 2.941 billion; Xuzhou Yuehai Water Company Limited 2019-1 ABN,
with the amout of RMB 1.732 billion; Silver Arrow China 2019-1 Retail Auto Mortgage
Loan Asset-backed Securities, with the total amount of RMB 8.947 billion; Shuang
Yuan 2019-1 Credit Asset-backed Securities, with the amount of RMB 2.624 billion;
Chang Ying 2019-2 Retail Auto Mortgage Loan Asset-backed Securities, with the
amount of RMB 4.497 billion; De Bao Tian Yuan Herald International Financial
Leasing Co., Ltd. 2019-2 ABN, with the amount of RMB 2.5 billion; Chang Ying 2019-
3 Retail Auto Mortgage Loan Asset-backed Securities, with the amount of RMB 3.501
billion; Bavatian Sky China Asset-backed Securities, with the amount of RMB 8 billion;
Driver China Nine Retail Auto Mortgage Asset-backed Securities, with the amount of
RMB 5.97 billion; HUI JU TONG 2019-1 Retail Auto Mortgage Asset-backed
Securities, with the amount of RMB 6 billion; Hecui 2019 Phase III Non-performing
Asset-backed Securities, with the amount of RMB 145 million; Hecui 2019 Phase V
Non-performing Asset-backed Securities, with the amount of RMB 150 million; Gong
Yuan Zhi Cheng 2019-7 Non-performing Asset-backed Securities, with the total amount
of RMB 450 million. As of May 15, 2020, FOTIC successfully issued Chang Ying 2020-
1 Retail Auto Mortgage Loan Asset-backed Securities, with the amount of RMB 3
billion; Bavatian Sky China 2020-1 Asset-backed Securities, with the amount of RMB
8 billion; Silver Arrow China 2020-1 Retail Auto Mortgage Loan Asset-backed
Securities, with the total amount of RMB 6.316 billion; Driver China Ten Retail Auto
Mortgage Asset-backed Securities, with the amount of RMB 5.97 billion; De Bao Tian
Yuan Herald International Financial Leasing Co., Ltd. 2020-1 ABN (Bond Connect),
with the amount of RMB 3 billion; An Yi Hua 2020-1 Individual Loan Asset-backed
Securities, with the amount of RMB 1.705 billion; HUI JU TONG 2020-1 Retail Auto
Mortgage Asset-backed Securities, with the amount of RMB 4 billion.
(D) Summary of Financial Conditions
As of the end of 2019, the company had total asset of RMB 18.413 billion, net
assets of RMB 17.717 billion, operating revenue of RMB 2.789 billion, and net profit
of RMB 1.791 billion. The quality of assets are good, meeting the requirements for the
trust company to be the trustee of the special-purpose trust.
FOTIC’s basic financial indicators for the year of 2017 to 2019 are as follows:
FOTIC’s Basic Financial Indicators for the Year of 2017 to 2019
17
Unit: RMB Ten Thousand Yuan
Year of
2019/December 31,
2019
Year of
2018/December 31,
2018
Year of
2017/December 31,
2017
Assets in Total 1,841,343.25 1,500,318.55 1,253,174.77
Trust Assets 44,576,502.17 44,905,978.77 50,060,882.05
Net Assets 1,771,664.86 1,258,865.02 895,266.51
Operating Revenue 278,872.85 299,775.72 258,446.50
Net Profit 179,104.66 194,613.69 162,144.01
(E) Default Records Statements
FOTIC has been in good operating condition since its establishment and has no
record of default in the previous securitization projects.
C. Bookrunner/Lead Underwriter: China Merchants Securities Co., Ltd.
Registered Address: 111 Fuhua 1st Road, Futian Street, Futian District, Shenzhen
Legal Representative: Da HUO(霍达)
Contacts: Menghui CAO(曹梦珲), Qian ZHENG(郑千), Kaiyu YANG(杨凯喻),
Yizhou SUN(孙逸舟)
Tel: 021-23519001, 010-60840885, 021-23519002, 010-60840903
Postal Code: 100045
Website: www.newone.com.cn
As part of the China Merchants Group whose history can be traced back to the
early 1900s, CMS has grown to become a leading full-service investment bank after 20
years of entrepreneurial development. CMS successfully went public on the Shanghai
Stock Exchange in November 2009 (Ticker: 600999). CMS has now been selected as a
constituent stock for CSI 100, SSE 180, SHSE-SZSE 300 Index and FTSE Xinhua
China A50 Index, etc.
CMS maintains sustainable and stable profitability, a scientific and reasonable risk
management structure and a comprehensive array of professional services. CMS has
multi-layer servicing channels for the clients and operates almost 200 domestic
securities business offices and branches in Mainland China and Hong Kong.
Leveraging its ownership of CMS International, China Merchants Futures, China
Merchants Capital, Bosera Asset Management, and China Merchants Asset
Management, CMS has truly developed into a securities service platform that aims to
18
comprehensively integrate international and domestic financial services. CMS has been
rated Class A AA level by the Securities Association of China as a securities company
for the past 12 years.
As an experienced market participant in credit asset securitization, by the end of
March, 2020, CMS has participated in the issuance of 308 credit asset-backed securities
as Lead Underwriter, consisting of 7 in 2014, 23 in 2015, 37 in 2016, 61 in 2017, 88 in
2018, 82 in 2019 and 10 in 2020.
At the end of 2019, total assets of CMS reached RMB 381.77 billion with total
liabilities of RMB 296.64 billion and owner's equity of RMB 85.13 billion. The revenue,
profit and net income in 2019 were RMB 18.71 billion, RMB 8.77 billion and RMB
7.31 billion, respectively.
D. Joint Lead Underwriters
Industrial and Commercial Bank of China Limited
Registered Address: 55 Fuxingmennei Street, Xicheng District, Beijing, People’s
Republic of China
Business Address: 55 Fuxingmennei Street, Xicheng District, Beijing, People’s
Republic of China
Legal Representative: Siqing CHEN(陈四清)
Contacts: Jialu QU(曲佳璐), Shiyue HE(何世悦)
Tel: 010-66107361, 010-81011218
Fax: 010-66107168
Postal Code: 100140
Website: www.icbc.com.cn
Industrial and Commercial Bank of China Limitied (hereinafter referred to as
“ICBC”) was established on January 1, 1984. On October 28, 2005, ICBC was wholly
restructured to a joint-stock limited company. On October 27, 2006, ICBC was
successfully listed on both Shanghai Stock Exchange and The Stock Exchange of Hong
Kong Limited. Through its continuous endeavor and stable development, ICBC has
developed into the leading bank in the world, possessing an excellent customer base, a
diversified business structure, strong innovation capabilities and market
competitiveness, and has provided a comprehensive range of financial products and
services to more than 7 million corporate customers and more than 600 million personal
customers. With serving the real economy as the basis of operation and management,
through supporting the deepening of supply-side structural reform and economic
transformation and upgrading with sticking to new concept, new finance and new
19
service, ICBC achieves the healthily sustainable development. Deeply promoting the
reformation and innovation and management transformation, personal banking, asset
management service, and financial market business have became the important engine
of ICBC’s earning growth. With its global and comprehensive management pattern
constantly improving, ICBC’s overseas net covers 42 countries and regions, whose
contribution to ICBC’s earnings grows more.
Mizuho Bank (China), Ltd.
Registered Address: 21F, 23F, Shanghai World Financial Center, 100 Century
Avenue, China (Shanghai) Pilot Free Trade Zone, People’s Republic of China
Business Address: 21F, 23F, Shanghai World Financial Center, 100 Century
Avenue, China (Shanghai) Pilot Free Trade Zone, People’s Republic of China
Legal Representative: Takeda Kazufumi(竹田和史)
Contacts: (Ruiqi DUAN)段瑞旗, (Tianxiu JI)吉田修, (Jing WANG)王, (Rongna
DAI)戴容娜
Tel: 010-65251888-3302, 021-38558355
Postal Code: 200120
Website: www.mizuhobank.com/china/cn/
Mizuho Bank (China), Ltd. (hereinafter referred to as (“Mizuho China”) was
officially established in May 2007 as a wholly foreign-owned bank. At present, Mizuho
China’s registered capital is RMB 9.5 billion. As the end of 2019, Mizuho China’s total
assets were RMB 127.5 billion, net assets were RMB 14.5 billion, the total balance of
deposits was RMB 90.92 billion, and the total balance of loans was RMB 50.38 billion.
Up to now, Mizuho China has opened 16 business outlets and is committed to providing
customers with more convenient services. From 2017 to 2019, Mizuho China has
served as joint lead underwriter for VINZ 2017-2 Retail Auto Loan Asset-Backed
Securities, Toyota Glory 2017 Phase II Auto Loan Credit Asset-backed Securities,
VINZ 2018-2 Retail Auto Loan Asset-Backed Securities, Rongteng 2018-1 Retail Auto
Loan Asset-Backed Securities, Rongteng 2018-2 Retail Auto Loan Asset-Backed
Securities, Rongteng 2019-1 Retail Auto Loan Asset-Backed Securities, Rongteng
2019-2 Retail Auto Loan Asset-Backed Securities, Rongteng 2019-3 Retail Auto Loan
Asset-Backed Securities, VINZ 2019-2 Retail Auto Loan Asset-Backed
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Securities,Shanghe 2019-4 Retail Auto Loan Asset-Backed Securities. Besides, Mizuho
China has served as syndicate member for more than 20 retail auto loan asset-backed
securities issued by Mercedes-Benz Financial Services Co., Ltd., BMW Automotive
Finance (China) Co., Ltd., Ford Automotive Finance (China) Co., Ltd., etc.
E. Fund Custodian: Industrial and Commercial Bank of China Limited Tianjin
Branch
Office Address: 123 Weidi Street, Hexi District Tianjin
Business Address: 123 Weidi Street, Hexi District Tianjin
Principal: Wei JIANG (蒋伟)
Contact: Yubiao LIU(刘允彪), Tao FENG(冯涛), Hetao HAN(汉和涛)
Tel: 022-28400924
Fax: 022-28400288
Postal Code: 300202
Website: www.icbc.com.cn
ICBC is the fund custodian ealiest engaging to the asset securitization pilot in
China, having rich experience of custody for the securitization projects. Since from the
credit asset securitization pilot started in 2005, having built good cooperative
relationships with other institutions and been experienced in fund custody, ICBC is the
fund custodian with the most extensive cooperating institutions and having provided
custody service the most comprehensive securitization asset type in the market. Since
from its business started up, ICBC has served as fund custodian for 61 credit asset
suciritization projects successively such as Jian Yuan 2005-1 Residential Mortgage
Loan Asset-backed Securitization project, with the total issuance amount of more than
RMB 300 billion. For each project, ICBC effectively and strictly complies with and
performs its duty as the fund custodian, ensuring each project runs well. Plenty of
experience has accumulated when ICBC provided service for the credit asset
securitization projects of ADBC, CCB, BOCOM, CMB, and other banks. ICBC has
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more competent and prossional team, and learns more about the requirement and each
link of the custody for the bank credit asset securitization projects.
ICBC’s service for asset custody mainly includes:
1. Basic service: account opening, asset custody, investment liquidation,
accounting, asset valuation, supervising transaction, collection and pay, information
disclosure, etc.
2. Value-added service: investment apraisal, performance evaluation, risk analysis,
consulting, personalized reports, etc.
F. Financial Advisor: Standard Chartered Bank (China) Limited
Registered Address: 16F (actually 15F), 17F/Room 2 (actually 16F/Room 2),
18F/Rooms 1, 2 and 3 (actually 17F/Rooms 1, 2 and 3), 19F/Rooms 2, 3 (actually
18F/Rooms 2,3), 22F/Rooms 1, 2 and 4 (actually 21F/Rooms 1, 2 and 4), 23F/Rooms
1, 2 (actually 22F/Rooms 1, 2), 25F/Room 1 (actually 23F/Room 1), and 28F (actually
26F), Standard Chartered Tower, 201 Century Blvd., Pu Dong New Area, Shanghai,
People’s Republic of China
Legal Representative: Xiaolei ZHANG (张晓蕾)
Contacts: Lydia LAI (来海粟), Tom SI (斯逸卿), Jane YANG (杨兼)
Tel: 021-38518896, 021-38518923, 021-38518637
Fax: 021-38963040
Postal Code: 200120
Website: https://www.sc.com/cn/
The predecessor of Standard Chartered Bank (China) Limited (hereinafter referred
to as “SCB China”) set up its first branch in Shanghai as early as 1858 and has remained
in operation in China for more than 150 years. In March 2007, upon the approval of the
China Banking Regulatory Commission, SCB China was permitted to restructure its
former Chinese branch into a wholly foreign-owned legal person bank registered in
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China, which is Standard Chartered Bank (China) Limited. As of the end of December
2019, SCB China’s registered capital is 10.727 billion yuan with the net assets of 23.762
billion yuan.
Standard Chartered Bank is the leading player in Asian securitization market and
has successfully helped many Asian countries for the closing of their first securitization
deals, such as China, Thailand, Indonesia, Philippines, etc. Standard Chartered Bank
was awarded the Asian Best Securitization House eleven times over the past 14 years,
including the latest 2017 Asian Best Securitization House awarded by the Asset
magazine in February 2018.
Since 2002, Standard Chartered Bank has actively participated in the development
of the Chinese securitization market and has extensive experience in asset securitization.
In 2015, Standard Chartered Bank finished 20 securitization deals in Asia, the scale of
which was over USD 14 billion dollars. Standard Chartered Bank (Hong Kong) Limited
(hereinafter referred to as “SCB HK”), acting as the financial consultant, assisted the
public offering of China’s first ever housing mortgage loans backed notes in 2005 (i.e.
the 2005 CCB’s Housing Mortgage Loans Backed Notes, the amount of which is RMB
3 billion), and then Standard Chartered Bank, through SCB China or SCB HK,
successfully assisted 9 securitization deals for other well-known Chinese financial
institutions (these deals including housing mortgage loans backed notes, enterprise
credit asset backed notes, lease receivables backed notes and auto loans backed notes,
etc.). Moreover, in February 2015, SCB China as the originator, has successfully issued
its first credit securitization trust in China – Zhen Cheng Credit Asset Securitization
2015-1 Asset-back Securities and became one of the first batch of foreign banks to
participate in the credit asset securitization pilot program in China.
As of 31 December 2019, SCB China has worked with many financial institutions
in issuing Credit Asset Backed Securities, as the lead underwriter, financial advisor or
co-manager. Key originators include: China Construction Bank, Genius Auto Finance
Co., Ltd., BMW Automotive Finance (China) Co., Ltd., Mercedes-Benz Financial
Services Ford Automotive Finance (China) Ltd, Beijing Hyundai Auto Finance Co., Ltd,
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Shanghai Automotive Group Finance Company Co., Ltd, SAIC-GMAC Automotive
Finance Co., Ltd, Volkswagen Finance (China) Co. and GAC-SOFINCO Automobile
Finance Co., Ltd. In addition, SCB China has been actively involved in Asset Backed
Notes transactions in CIBM market, for originators include: Herald International
Financial Leasing Co., Ltd, International Far East Leasing Co., Ltd, Beijing Jingdong
Century Trade Co., Ltd and Shanghai Pinzhong Commercial Factoring Co., Ltd, etc.
G. Notes Custodian/Paying Agency: China Central Depository & Clearing Co.,
Ltd.
Registered Address: 10 Finance Avenue, Xicheng District, Beijing
Legal Representative: Ruqing SHUI(水汝庆)
Tel: 010-88170738
Postal Code: 100033
Website: www.chinabond.com.cn
China Central Depository & Clearing Co., Ltd. (hereinafter referred to as “CCDC”)
is a state wholly-owned financial institution providing national bond markets with
registration, custodian, settlement service concerning to government bond, financial
bond, corporation bond and other fixed income securities, the only government bond
depository authorized by MOF, responsible for the establishment and operation of the
government bond depository system, and the registration, custodian and settlement
institution in the China’s Inter-Bank Bond Market as well as the primary depository for
commercial bank book-entry government bond transaction appointed by the People’s
Bank of China. CCDC is a national non-bank financial institution, registered with the
State Administration of Industry and Commerce in December 1996, the registered
capital of which is RMB 20 billion Yuan.
H. Rating Agencies
China Bond Rating Co., Ltd.
Registered Address: F6, Building 2, 28 Finance Avenue, Xicheng District, Beijing
Legal Representative: Guanghua FENG(冯光华)
Contacts: Zhanze PENG(彭占泽), Xiaodong HAO(郝晓东), Tong LI(李彤)
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Tel: 010-88090208, 010-88090106, 010-83250518
Fax: 010-88090102
Postal Code: 100032
Website: www.chinaratings.com.cn
China Bond Rating Co., Ltd. (hereinafter, “CBR”) was founded in 2010 by
National Association of Financial Market Institutional Investors (NAFMII) on behalf
of all the members with registered capital of RMB 1.5 billion. CBR is the first new-
type credit rating company primarily in the investor-paid operation mode and added by
other various operation modes, and also the only credit rating institution with the
investor-paid operation mode approved by the People’s Bank of China. CBR provides
re-rating, double-rating and other services with the principals of independence,
objectivity and justice.
After establishment, CBR, through many times of recruitment and selection,
picked up many experienced analysts with more than 5-year experience on study and
development of financial innovation products, to build up the innovation products
analyst group. After the group built up, CBR took almost one year to develop the
innovation product rating model, build up the rating system and draft the rating methods.
CBR has already accomplished the building-up work for the securitization rating
technology system and independently developed the rating models and technology
system suitable for the various domestic securitization products.
Since the expansion of the asset securitization pilot, CBR participated in all the
projects successfully issued on the China’s Inter-Bank Market, with rich asset
securitization project rating experience and a group of experienced analysts. CBR uses
the same standard to objectively disclose the credit risk, providing comprehensive,
sustainable and comparable credit rating information services.
China Chengxin International Credit Rating Co., Ltd.
Registered Address: 60101, Building 1, 2 Nan Zhu Gan Hu Tong, Dongcheng
District, Beijing
Legal Representative: Yan YAN(闫衍)
Contacts: Danni ZHENG(郑丹妮), Xuan XUE(薛璇)
Tel: 010-66428877-331, 010-66428877-474
Fax: 010-66426100
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Postal Code: 100010
Website: http://www.ccxi.com.cn
China Chengxin International Credit Rating Co., Ltd. (hereinafter referred to as
“CCXI”) is a international and professional sino-foreign joint venture credit rating
agency first incorporated in the State Administration for Industry and Commerce with
the approval of the People's Bank of China and People's Republic of China Ministry of
Foreign Trade and Economic Cooperation. For now, its registered capital is RMB
32.6667 million.
Since from its first ratings for corporate bonds, by now, CCXI has provided credit
ratings service for more than 11 thousand enterprises (companies), and the entity rated
extend from single commercial enterprise to bank, insurance company, securities
company, fund management company, trust investment company, AMC, guarantee
compnay, futures brokerage company, financial leasing company, and other financial
institutions, the products rated entend from commercial corporate bonds to short-term
financing bonds, medium-term notes, convertible bonds, financial institution bonds
(subordinated bonds), money market funds, trust related products, structured financing
products, and other debt financing instruments, quasi-fixed return products. Meanwhile,
the rating business scale of CCXI achieved a fast development.
I. Accounting Consultant and Tax Consultant
Accounting Consultant: Deloitte Touche Tohmatsu Certified Public
Accountants LLP (special general partnership)
Business Address: F6, Building 2, 28 Financial Avenue, Xicheng District, Beijing
Executive Partner: Wei HONG(洪卫)
Contacts: Xiaobo MA(马晓波), Yiding ZHONG(钟一丁), Guannan ZHANG(张
冠楠), Hui MIAO(苗卉), Lei NIU(牛蕾)
Tel: 022-23206836, 022-23206519
Fax: 022-83126099
Postal Code: 300051
Website: http://www.deloitte.com.cn
Tax Consultant: Shanghai Deloitte Tax Ltd. Beijing Branch
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Business Address: F12, China Life Financial Center, Building 23, Zhenzhi Road,
Chaoyang District, Beijing
Principal: Jie ZHANG(张捷)
Contacts: Meiyan JIN(金美言)
Tel: 010-85124197
Postal Code: 100026
Website: http://www.deloitte.com.cn
As one of the global professional service institutions, Deloitte has offices in 22
major cities including China Mainland, Hong Kong, Macao, Ulaanbaatar Mongolia,
etc., and about 14 thousand professionals delivering high-quality professional services
to the clients.
The Deloitte China securitization team includes more than 20 partners, 100 staff,
and technology center. Deloitte China, as the representative of accounting firms for
many times, discussed the innovative development of China securitization with various
regulatory institutions, sharing international experience, and came up with the Plan of
Mix-composed Non-performing Asset Securitization. Besides, Deloitte is also the
member of NAFMII and accounting professional committee.
J. Legal Counsel: Beijing Zhong Lun Law Firm
Business Address: 28, 31, 33, 36, 37/F, SK Building, 6A Jianguomenwai Avenue,
Chaoyang District, Beijing
Principal: Xuebing ZHANG(张学兵)
Contact: Borong LIU (刘柏荣), Jingyi LU (路竞祎), Xudong LI (李旭东), Yi
ZHAO (赵祎), Yuxuan GUO(郭玉璇), Chen ZHOU(周晨)
Tel: 010-59572398, 010-59572414, 010-50872754
Fax: 010-65681022, 010-65681838
Postal Code: 100022
Website: www.zhonglun.com
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Founded in 1993, Beijing Zhong Lun Law Firm (hereinafter referrd to as “Zhong
Lun”) was among the first law firms approved by China’s Ministry of Justice. After
years of rapid and steady growth, Zhong Lun has become one of the largest full-service
law firms in China.
The legal teams of Zhong Lun have provided professional legal service for many
domestic securitization innovative projects. By May 2020, Zhong Lun has already
assisted more than 500 securitization products to be issued successfully, of which the
total issuance amount is more than RMB 2000 billion. Among them, more than 300
credit asset securitization products have been successfully issued, of which the
originators include major domestic policy banks, state-owned commercial banks,
national joint-stock commercial banks, financial asset management corporations, auto
finance companies, municipal commercial banks, rural commercial banks and
financial leasing companies and the type of products include corporate loans
securitization, railway special project credit asset securitization, residential mortgage
loan securitization, auto mortgage loan securitization, reorganization asset
securitization, credit card asset securitization, small consumer loan securitization,
financial leasing asset securitization, non-performing asset securitization, etc.
3. Declarations of Affiliation among Transaction Parties
TGBAFC is both the Originator and the Servicer in this transaction; the Fund
Custodian Industrial and Commercial Bank of China Limited Tianjin Branch is the
branch of Industrial and Commercial Bank of China Limited, one of the Joint Lead
Underwriters.
Beside the affiliation stated above, there is no equity affiliation among the
Originator, the Trustee, the Lead Underwriters and the Notes Custodian/Paying Agent.
4. Rights and Obligations of the Participants
A. Originator
The Originator, as the Settlor of the Trust, has the right to acquire the Net
Subscription Amount, to inquire the Trustee about the management, disposition, and
balance of payments, and to require the Trustee to make relevant explanation thereof.
The Settlor can read, transcribe or copy the books of the trust related to the Trust
Property and other documents related to handling the affairs of the Trust. Other rights
stipulated by PRC Laws and agreed in the Trust Agreement.
The Settlor shall provide necessary cooperation to the due diligence on the
Underlying Assets and the reviewing process for issuing opinions conducted by legal,
accounting servicing agencies, etc., such cooperation include but is not limited to
making best efforts to provide materials necessary for the work of the foregoing
servicing agencies. The Settlor consents that the Trustee shall manage, use, dispose of
the Trust Property in accordance with the agreed methods under Trust Agreement. The
Settlor shall repurchase the Ineligible Assets according to the provisions of Trust
28
Agreement. When a Right Perfection Event occurs, the Settlor is obligated to inform
the related Borrower, Co-Borrower, Guarantor (if any) and Insurer (if any) or the
relevant insured person (if any) under the insurance policy on the Mortgage Loan or the
Mortgage Vehicle of the fact that the Underlying Asset has been entrusted as the Trust
Property. After the Trust has become effective, the Settlor shall provide necessary
cooperation to the Trustee for its performance of the trust obligations. After the Trust
has become effective, if the Settlor receives funds paid by the Borrower and/or Co-
Borrower that belongs to the Trust Property, then the Settlor shall deliver such funds to
the Servicer appointed by the Trustee in time without delay, as the Trust Property.
Except for entrusting the Trust Property to the Trustee according to the Trust Agreement,
the Settlor shall not sell, pledge, mortgage, assign or transfer the Trust Property to any
other entity, shall not take other actions that would harm the Trustee’s ownership over
the Trust Property or the Loan Files, and shall not grant any security interest over the
Trust Property or the related Loan Files. Other obligations stipulated by the PRC Laws
and agreed in the Trust Agreement.
B. Trustee
The Trustee has the right to issue the Notes. The Trustee has the right to acquire
Service Fees according to Trust Agreement. The Trustee has the right to propose to
convene the Meeting of Noteholders, when it believes necessary, for deciding the
material matters related to the trust affairs by vote and deal with the trust affairs
according to the vote. The Trustee has the right to manage, use, dispose of the Trust
Property under Trust Agreement in the manners stipulated in Trust Agreement. Under
the premise of beneficial to the purpose of the trust, and with accordance to Trust
Agreement, the Trustee has the right to authorize the Servicer, the Fund Custodian, the
Rating Agencies, the Auditor and other entities to handle the relevant trust affairs. The
Trustee has the right to entrust the Notes Custodian and the Payment Agent to provide
registration and custody services and the services of paying principal and interest for
the Notes according to the Trust Agreement. The Trustee has the right to exercise the
other rights related to the Trust Property stipulated by the Laws and Trust Agreement.
The Trustee, according to PRC Laws, the Trust Agreement, Servicing Agreement and
other Transaction Documents, has the right to participate in and learn about the entire
process prior to the creation of the Trust, including the Underlying Asset selection,
confirmation, the formulation of the securitization program and other procedures, and
it has the right to acquire the related materials and information. The Trustee has the
right to require the Servicer, the Fund Custodian and other relevant institutions to
provide information and materials related to the Trust Property, which is to be used for
but not limited to the general management, accounting and the disclosure of information
to the outsiders and other purposes of the Trust Property. The Trustee has the right to
require the Servicer, the Fund Custodian and other related institutions to cooperate with
the Auditor entrusted by the Trustee to conduct the auditing related to the Trust Property.
The Trustee has the right to require the Servicer, the Fund Custodian and other related
institutions to cooperate with the Rating Agencies entrusted by the Trustee to track
rating continuously of the Senior Notes; The Trustee shall handle the trust affairs by
29
itself, but if otherwise stipulated in Trust Agreement or has some inescapable matters,
the Trustee can entrust others to handle on behalf of it. The expense paid by the Trustee
for handling the trust affairs and its debt to a third party shall be paid by the Trust
Property. In case the Trustee makes any advance payment with its own property, it will
be reimbursed for the advanced payment with the Trust Property according to Trust
Agreement. Other rights stipulated by PRC Laws and Trust Agreement.
The Trustee shall pay the Net Subscription Amount to the Settlor according to
Trust Agreement. According to Trust Agreement, the Trustee shall properly keep the list
of the Noteholders. The Trustee shall conduct accounting and report over the Trust
According to the relevant laws and regulations. The Trustee shall engage CBR to
conduct initial rating and tracking rating for the Senior Notes, and the Service Fees of
CBR to do the initial rating and tracking rating shall be borne by the Trust Property.
The Trustee shall entrust qualified commercial banks to serve as the Trust Property
Fund Custodian, and respectively entrust other agencies with business qualification to
perform the duty of the Underlying Asset management and other entrusted duties.
Unless otherwise stipulated in Trust Agreement or as the affairs within the scope of the
Servicer’s management of the Asset Pool or the Fund Custodian’s custody duty of the
Trust Fund provided in the Transaction Documents, the Trustee shall handle the trust
affairs by itself, without stipulation in Trust Agreement or the approval of the Meeting
of Noteholders, it shall not replace the Servicer or the Fund Custodian stipulated in
Trust Agreement. The Trustee engages in trust activities, it shall comply with the
stipulations of PRC Laws and Trust Agreement, and shall not harm the national interest,
the social public interest and others’ legitimate interests of any other party. Any
creditor’s right arising out of the management and disposal of the Trust Property by the
Trustee shall not be offset against the debts incurred in connection with the Trustee’s
own property; the credit’s rights and debts incurred by the management and disposal of
trust property of different trusts shall not be offset with each other. The Trustee shall
not violate the purpose of trust or its management duties when it manages or disposes
of the Trust Property. In the case where the Trust Property incurred losses due to the
Trustee’s violation of its management duties or improper handling of the trust affairs,
the Trustee shall be responsible to make compensations at the cost of its own inherent
assets; the debt owed to the third party raised arising out of the Trustee’s breach of its
management duties or improper handling the trust affairs shall be borne by the Trustee
with its own inherent assets. The Trustee shall abide by Trust Agreement, and deal with
the trust affairs under the principal of pursuing the best interest of the Beneficiary; the
Trustee shall manage the Trust Property diligently, and perform the duties of being
honest, trustworthy, and prudent. The Trustee shall not convert the Trust Property into
its own inherent assets; if the Trustee converts the Trust Property into its own inherent
assets, it must restore such Trust Property to its original status; if the Trust Property
incurs losses because of such conversion, the Trustee shall be responsible for the
damages. In addition to acquiring the Service Fees according to Trust Agreement, the
Trustee shall not utilize the Trust Property to make profit for itself; if the Trustee utilizes
the Trust Property to make profits for itself, such profit shall be attributed to the Trust
Property. Unless after an Event of Default has occurred or has obtained the approval of
30
the Meeting of Noteholders and has informed the Rating Agencies, the Trustee shall not
sell, transfer all or part of the Trust Property (except for requiring the Settlor to
repurchase the Ineligible Asset or accepting the Settlor’s Clean-up Call according to
Section 4 and Section 5 of Trust Agreement). Unless obtained the approval of the
Meeting of Noteholders after the Trust Termination Date and informed the Rating
Agencies, and transacted under fair market price, the Trustee shall not transact its own
inherent property with the Trust Property or transact the property under different trusts
with the Trust Property under the Trust Agreement. Shall not grant any type of security
interest in the Trust Account, the Trust Property and/or the related Loan Files. The
Trustee shall manage the Trust Property separately from its own inherent property, and
keep separate accounting records of properties of different trusts. The Trustee shall
properly and safely keep the complete records for handling the trust affairs, and the
safely-keeping period shall be no less than fifteen (15) years starting from the Trust
Termination Date. The Trustee shall continuously disclose the information related to
the Trust Property and the Notes according to the related provisions of the PRC Laws
and Trust Agreement; when the Settlor wants to learn about the related situations of the
Trust Property, the Trustee shall cooperate positively and make relevant explanation.
The Trustee shall supervise and urge the Servicer, the Fund Custodian and other
intermediary service agencies that it engaged or hired to prudently execute their
respective duties and obligations. During the Trust Duration, if the duty of the Trustee
terminates, the Trustee shall properly keep all materials related to the Trust, and
promptly transfer the materials to the new Trustee. Other obligations stipulated by PRC
Laws and agreed in the Trust Agreement.
C. Servicer
The Servicer has the right to perform the obligations of managing the Asset Pool
pursuant to the Serving Agreement and the Loan Servicing Manual; Right to collect the
Service Fees pursuant to Section 12 of the Serving Agreement; Other rights provided
by the PRC Laws and agreed in the Serving Agreement.
The Servicer has the obligations to manage the Asset Pool according to the Loan
Servicing Manual and the requirements in the Serving Agreement; To make best efforts
to recover all the due receivables relating to the Asset Pool according to the Loan
Servicing Manual, and calculate the amount of money payable by each Borrower
according to the corresponding Mortgage Loan Agreement; According to the Property
Law of the People’s Republic of China, the Road Traffic Safety Law of the People’s
Republic of China, and the Provisions on Motor Vehicle Registration, the Servicer (only
in the case where the Originator acts as the Servicer) shall continue to be registered as
the nominal Mortgagee at the registration department of appropriate Chinese
Government Authorities, but such agreement shall not affect the legal transfer of the
Mortgage Right to the Trustee and the Trustee’s legal acquisition of the Mortgage Right;
When the Servicer loses the Required Ratings from any of the Rating Agencies, the
Servicer shall provide funds equal to the Commingle Reserve Amount to the
Commingle Reserve Account according to the Trust Agreement; To provide the Service
31
agreed in the Serving Agreement; obey and perform the warranties, covenants and other
obligations under the Serving Agreement and other Transaction Documents to which it
is a party; Other obligations provided by PRC Laws and the Serving Agreement.
D. Fund Custodian
The Fund Custodian has the right to collect the Service Fees pursuant to the Fund
Custody Agreement; Right to request the Trustee to provide the necessary documents
and information; Other rights provided by the PRC Laws and this Fund Custody
Agreement.
The Fund Custodian shall assist the Trustee to open the Trust Account; safekeep
the funds in the Trust Account, and shall not commingle the funds held by the Fund
Custodian with the Funds in the Trust Account; examine the instruction sent by the
Trustee according to the Fund Custody Agreementm and execute the effective
instructions sent by the Trustee; pay the investment returns to the Noteholders in the
way stipulated in the Fund Custody Agreement; the Fund Custodian shall make the fund
custody report on time and submit to the Trustee according with the relevant stipulations
in the Fund Custody Agreement; the Fund Custodian shall safekeep relevant documents
and materials related to its fund custody obligation for the whole duration of the Fund
Custody Agreement and no shorter than fifteen (15) years after the Fund Custody
Terminated; other obligations stipulated in the Laws and regulations and the Fund
Custody Agreement.
E. Principal Underwriters
The Principal Underwriters have the right to organize and lead the Syndicate and
to coordinate the operations of the Syndicate; the Bookrunner has the right to lead the
Bookbuilding efforts of the Senior Notes pursuant to the Underwriting Agreement; the
right to receive the Underwriting Fees pursuant to the Underwriting Agreement; other
rights stipulated by PRC Laws and in the Underwriting Agreement.
According to the Underwriting Agreement, the Principal Underwriters have the
obligation to transfer subscription amount of the Notes after deducting the
Underwriting Fees to the Issuer’s Proceeds Account in accordance with the
Underwriting Agreement in full and in a timely manner; to perform the Standby
Commitment obligations for the Notes pursuant to the Underwriting Agreement; to
provide the Originator with invoices in a timely manner pursuant to the Underwriting
Agreement; to provide the Issuer and the Originator with materials relevant to the
Underwriting Agreement, and ensure all the information and materials provided are
authentic, accurate, complete and without false statement, material misleading or
material omission; other obligations stipulated by PRC Laws and in the Underwriting
Agreement.
32
F. Syndicate Members
The Syndicate Members are entitled to participate in the issuance of the Notes and
obtain the corresponding Underwriting Fees; the members shall obey the underwriting
obligations agreed in the Underwriting Syndicate Agreement.
G. Notes Custodian and Paying Agent (CCDC)
The Notes Custodian and Paying Agent provide the Notes with registration and
custody services, the principal and interest payment service in accordance with the
related agreements it has signed with the Issuer, and is entitled to the corresponding
fees.
5. Distribution of Collections
Prior to or on the Trust Effective Date, the Trustee shall open an independent RMB
Trust Account in the name of the Trustee pursuant to the Fund Custody Agreement, to
record the balance of the Trust Property in the form of cash. Under the Trust Account
there shall be a Trust Collection Account (including the Principal Sub-account and the
Income Sub-account), a Payment Account (including the Notes Payment Account and
the Expense Account), a Liquidity Reserve Account, a Service Transfer and Notice
Reserve Account, a Commingle Reserve Account and a Tax Reserve Account.
In principle, the cash flow of the Trust is allocated once a month. In different
scenarios, the cash flow distribution mechanisms of this Trust are summarized as
follows:
A. Distribution of Collections before the Occurrence of Event of Default
(A) Distribution of Funds in the Income Sub-account before the Occurrence of the
Event of Default
On each Trust Distribution Date before the occurrence of the Event of Default, the
Trustee shall distribute the Income Collections received during the immediately
preceding Collection Period, and the funds transferred to the Income Sub-account from
the Principal Sub-account, the Liquidity Reserve Account, the Service Transfer and
Notice Reserve Account, the Commingle Reserve Account, and the Tax Reserve
Account pursuant to item (1) of Section 9.5.2, Section 9.8, Section 9.9, Section 9.10
and Section 9.11 of Trust Agreement, in the following order of priority (if multiple
payables in the same order of priority cannot be paid in full at the same time, then each
item shall be paid pro rata to the payable amount, and the deficiencies shall be
distributed pursuant to the following order of priority in the next period):
(1) The taxes and fees in relation to the Trust to be paid by the Trustee (including
but not limited to value-added tax and surcharges) according to PRC Laws,
among which, the Trustee shall credit the amount equivalent to the Taxes in
ralation to the Trust calculated according to the formula and other reasonable
33
amount (if any) related to the Taxes estimated by the Trustee to the Tax Reserve
Account;
(2) In the same order and pro rata to the payable amount, transfer the Service Fees
to the Trustee, the Fund Custodian, the Paying Agent, the Rating Agencies (if
any), the Auditor (if any), and the Back-up Servicer (if any), as well as the
Reimbursable Expenses to the extent of the Maximum of Priority Expense
Payment, of the aforementioned entities and of the Servicer to the Expense
Account;
(3) If the Originator does not serve as the Servicer, transfer the amount equivalent
to the Service Fees shall be paid to such Servicer, to the Expense Account;
(4) Transfer the accumulatively accrued but unpaid interest payable on the Class
A1 Notes and the Class A2 Notes as on the first Payment Date after such Trust
Distribution Date to the Notes Payment Account;
(5) In the same order and pro rata to the payable amount, transfer (a) the
corresponding amounts to the Liquidity Reserve Account to ensure the balance
in such account no less than the Required Liquidity Reserve Amount, (b) the
corresponding amounts to the Service Transfer and Notice Reserve Account to
ensure the balance in such account no less than the Required Service Transfer
and Notice Reserve Amount;
(6) Transfer the aggregated amount of (a)+(b)+(c)-(d) to the Principal Sub-account,
where: (a) is the Outstanding Principal Balance of the Underlying Assets that
have become Defaulted Loans in the immediately preceding Collection Period
as of the moment of becoming Defaulted Loans; (b) is the Outstanding
Principal Balance of the Underlying Assets that have become Defaulted Loans
in the previous Collection Periods other than the immediately preceding
Collection Period as of the moment of becoming Defaulted Loans; (c) is the
amount that has been transferred to the Income Sub-account from the Principal
Sub-Account on all the previous Trust Distribution Dates according to Section
错误!未找到引用源。错误!未找到引用源。 item (1)0 of the Trust Agreement;
and (d) is the amount that has been transferred to the Principal Sub-account
from the Income Sub-account on all the previous Trust Distribution Dates
according to Section 9.5.1 item (6) of the Trust Agreement;
(7) If the Originator serves as the Service, transfer the amount equivalent to the
Service Fees shall be paid to such Servicer, to the Expense Account;
(8) In the same order and pro rata to the payable amount, transfer the part of the
Reimbursable Expenses in excess of the Maximum of Priority Expense
Payment payable to the Trustee, the Servicer, the Fund Custodian, the Paying
Agent, the Rating Agencies (if any), the Auditor (if any) and the Back-up
Servicer (if any), to the Expense Account;
(9) If any of the Accelerated Payment Event has occurred, credit all of the balance
34
to the Principal Sub-account; if no Accelerated Payment Event occurs, then
proceed the distribution as follows;
(10) In the case where any Accelerated Payment Event has occurred,
transfer all the remaining funds in the Income Sub-account for this period to
the Notes Payment Account, as the periodic returns of the Subordinated Notes.
(B) Distribution of Funds in the Principal Sub-account before the Occurrence of
the Event of Default
On each Trust Distribution Date before the occurrence of the Event of Default, the
Trustee shall distribute the Principal Collections received during the immediately
preceding Collection Period and the funds that have been transferred to the Principal
Sub-account from the Income Sub-account and the Commingle Reserve Account
respectively pursuant to Section 9.5.1 and Section 9.10 of the Trust Agreement in the
following order of priority (but item (1) below shall be done before the corresponding
amount transferred to the Principal Sub-account from the Income Sub-account) (if
multiple payables in the same order of priority cannot be paid in full at the same time,
then each item shall be paid pro rata to the payable amount, and the deficiencies shall
be distributed pursuant to the following order of priority in the next period):
(1) Transfer to the Income Sub-account the amount necessary to replenish the
Income Sub-account so that the account balance (including the corresponding
amount transferred from the Liquidity Reserve Account) of the Income Sub-
account is sufficient to cover the payable amounts due under item (1) through
item (5) of Section 9.5.1 of the Trust Agreement;
(2) In the case where no Accelerated Payment Event has occurred, transfer the
corresponding amount to the Notes Payment Account in the following order of
priority: ①if the principal of Class A2 Notes has not been paid off, then pay
the principal of the Class A1 Notes until the outstanding principal balance of
35
Class A1 Notes after the payment on the first Payment Date following such
Trust Distribution Date reaches the corresponding Target Balance of the Class
A1 Notes on the First Payment Date after such Trust Distribution Date
stipulated in the Schedule XI, the Class A1 Notes pincipal amortization
schedule, of the Trust Agreement, then pay the Outstanding Principal Balance
of the Class A2 Notes, until all the principal of Class A2 Notes is paid off; ②
if all the principal of Class A2 Notes has been paid off but the principal of the
Class A1 Notes has not been paid off, then continue to pay the Outstanding
Principal Balance of the Class A1 Notes, until all the principal of the Class A1
Notes is paid off;
(3) In the case where any Accelerated Payment Event has occurred, transfer a
certain amount to the Notes Payment Account to pay the Outstanding Principal
Balance of the Class A1 Notes and the Class A2 Notes, until all the principal of
the Senior Notes is paid off;
(4) Transfer a certain amount to the Notes Payment Account until such amount is
equal to the sum of Outstanding Principal Balance of all Subordinated Notes
on such Trust Distribution Date;
(5) All the remaining funds shall be deemed as returns on the Subordinated Notes
and transferred to the Notes Payment Account.
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B. Distribution of Collections after the Occurrence of Event of Default
On each Trust Distribution Date at or after the occurrence of Event of Default, the
Trustee shall distribute the Collections received and deposited in the Income Sub-
account and the Principal Sub-account during the immediately preceding Collection
Period and the aggregation of funds that have been transferred to the Trust Collection
Account on such Trust Distribution Date from the Liquidity Reserve Account, the
Service Transfer and Notice Reserve Account, the Commingle Reserve Account, and
the Tax Reserve Account according to Section 9.8, Section 9.9, Section 9.10 and
Section 9.11 of the Trust Agreement respectively in the following order of priority (if
multiple items of funds in the same order of priority cannot be paid in full at the same
time, then each item shall be paid pro rata to the payable amount, and the deficiencies
shall be distributed pursuant to the following order of priority in the next period):
(1) The taxes and fees in relation to the Trust to be paid by the Trustee (including
but not limited to value-added tax and surcharges) according to PRC Laws,
among which, the Trustee shall credit the amount equivalent to the Taxes in
ralation to the Trust calculated according to the formula and other reasonable
amount (if any) related to the Taxes estimated by the Trustee to the Tax Reserve
Account;
(2) In the same order and pro rata to the payable amount, transfer the Service Fees
to the Trustee, the Fund Custodian, the Notes Custodian, the Paying Agent, the
Rating Agencies (if any), the Auditor (if any), and the Back-up Servicer (if any),
as well as the Reimbursable Expenses of the aforementioned entities and of the
Servicer, to the Expense Account;
(3) If the Event of Default is not caused by the Servicer directly or indirectly,
transfer the Service Fees shall be paid to the Servicer to the Expense Account;
(4) Transfer a certain amount to the Notes Payment Account, until such amount
transferred is equal to the accumulatively accrued but unpaid interest payable
on the Class A1 Notes and the Class A2 Notes as on the first Payment Date
after such Trust Distribution Date;
(5) Transfer a certain amount to the Notes Payment Account, until such amount
transferred is equal to the sum of the amount of the Outstanding Principal
Balance of the Class A1 Notes and the Class A2 Notes, until all the principal of
Class A Notes is paid off;
(6) If the Event of Default is caused by the Servicer directly or indirectly, transfer
the Service Fees shall be paid to the Servicer to the Notes Payment Account;
(7) Transfer a certain amount to the Notes Payment Account, until such amount
transferred is equal to the sum of Outstanding Principal Balance of all
Subordinated Notes on such Trust Distribution Date;
(8) All the remaining funds shall be deemed as returns on the Subordinated Notes
37
and transferred to the Notes Payment Account.
Before the Meeting of Noteholders confirms whether or not such Event of Default
is caused by the Servicer, the Trustee shall distribute in the order of priority as if such
Event of Default is not caused by the Servicer.
C. Distribution of Trust Property after Trust Termination
After the Trust Termination Date, the Trustee shall distribute the Collections
acquired from liquidation, and the aggregated amount of other funds in the Trust
Account (but not including the Commingle Reserve Amount, unless such funds shall
be transferred into the Trust Collection Account according to Trust Agreement) in the
following order of priority (if multiple payables in the same order of priority cannot be
paid in full, then each item shall be paid pro rata to the payable amount):
(1) The taxes and fees in relation to the Trust to be paid by the Trustee under PRC
Laws (including but not limited to value-added tax and surcharges);
(2) Expenses occurred for liquidating the Trust Property pursuant to the
Transaction Documents;
(3) Pay the Service Fees and the Reimbursable Expenses to the Trustee, the Fund
Custodian, the Paying Agent, the Servicer, the Rating Agencies (if any), the
Auditor, and the Back-up Servicer (if any), and other Reimbursable Expenses
that shall be paid with the Trust Property;
(4) Pay the interest on the Class A1 Notes and the Class A2 Notes in the same order,
until the payable interest on all the Senior Notes is zero (0);
(5) Pay in the same order and on a pro rata basis the Outstanding Principal Balance
of the Class A1 Notes and the Class A2 Notes, until all the principal of Senior
Notes is paid off;
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(6) Pay on a pro rata basis and in the same order the Outstanding Principal Balance
of the Subordinated Notes, until all the principal of the Subordinated Notes is
paid off;
(7) All the remaining funds shall be deemed as returns on the Subordinated Notes.
D. Use of Funds in the Liquidity Reserve Account
On each Trust Distribution Date before the occurrence of any Event of Default,
the Fund Custodian shall make the payment with the funds in the Liquidity Reserve
Account on such dates in following order of priority, according to the Trustee’s
distribution instructions:
(1) Transfer the part of amount in excess of the Required Liquidity Reserve
Amount into the Income Sub-account;
(2) Transfer into the Income Sub-account a certain amount equivalent to the
deficiencies (the deficiencies after the excess amount has been transferred
according to the Section 9.8.1 item (1) of the Trust Agreement) of the payable
amount stipulated in the Section 9.5.1 item (1) through item (4) of the Trust
Agreement;
(3) Keep the remaining funds in the Liquidity Reserve Account.
After the principal of Senior Notes is paid in full or after the occurrence of any
Event of Default, the Trustee shall instruct the Fund Custodian to transfer all funds in
the Liquidity Reserve Account at the time into the Income Sub-account.
E. Use of Funds in the Service Transfer and Notice Reserve Account
(1) At the time when the Servicer transfers its service to the Back-up Servicer or the
Successor Servicer under the provisions of the Servicing Agreement, the Trustee
shall instruct the Fund Custodian to pay the amount equal to the Estimated Service
Transfer Fees from the Service Transfer and Notice Reserve Account to the account
of the Back-up Servicer or the Successor Servicer (if applicable) on the next Trust
Distribution Date.
(2) On each Trust Distribution Date, if the amount of funds in the Service Transfer and
Notice Reserve Account exceed the Required Service Transfer and Notice Reserve
Amount, the Fund Custodian shall, under the distribution instructions of the Trustee,
transfer such excess amount to the Income Sub-account.
(3) On any day after the occurrence of item (a) through item (d) of the Right Perfection
Event, if the Servicer, the Back-up Servicer, the Successor Servicer, or the Trustee
is required to deliver Right Perfection Notice pursuant to Section 6 of the Trust
Agreement, and the Trustee instructs the Fund Custodian to pay the amount, to the
extent of the account balance of the Service Transfer and Notice Reserve Account,
and equal to the Estimated Notice Fees from the Service Transfer and Notice
39
Reserve Account to the accounts of the Servicer (or the Back-up Servicer, the
Successor Servicer, or the Trustee, as applicable to the parties performing the
obligation of Right Perfection Notice) on the next Trust Distribution Date for the
payment of the expenses of sending the Right Perfection Notice.
(4) After the principal and interest on the Senior Notes has been paid in full, the Fund
Custodian shall, under the distribution instructions of the Trustee, transfer all the
remaining funds (if any) in the Service Transfer and Notice Reserve Account into
the Income Sub-account under the Trust Collection Account.
F. Use of the Funds in the Commingle Reserve Account
(1) If the Trust Property commingles with the own property of the Servicer, the Trustee
shall instruct the Fund Custodian to transfer the amount equal to the amount of the
commingled property (but limited to the amount of Collections actually generated
from the Asset Pool) from the Commingle Reserve Account, to the extent of the
account balance of such Commingle Reserve Account, to the Income Sub-account
and/or the Principal Sub-account correspondingly under the Trust Collection
Account accordingly on the next Trust Distribution Date. If the Servicer
distinguishes the commingled Trust Property from the Servicer’s own property
subsequently, the Servicer is entitled to the corresponding amount of the
aforementioned Trust Property, until the amount is equal to the total amount
transferred from the Commingle Reserve Account to the Income Sub-account
and/or the Principal Sub-account.
(2) After the full payment of the principal and interest on the Senior Notes or the Trust
Termination Date, the Trustee shall instruct the Fund Custodian to transfer all the
funds in the Commingle Reserve Account by that time to the account designated
by the Servicer as Special Trust Benefit.
G. Use of the Funds in the Tax Reserve Account
According to the PRC Laws, the taxes and fees related to the Trust are paid by the
Trustee; the Trustee shall instruct the Fund Custodian to make payments in the
following order of priority with the funds in the Tax Reserve Account:
(1) pay the taxes due and payable by the Trust at that time;
(2) keep the remaining funds in the Tax Reserve Account.
After all the payable taxes of the Trust are paid off, the Trustee shall instruct the
Fund Custodian to transfer all the remaining account balance in the Tax Reserve
Account to the Income Sub-account.
H. Use of Funds in the Notes Payment Account
Prior to the occurrence of the Event of Default, the Trustee shall instruct the Fund
Custodian to make payments in the following order of priority with the interest amount
in the Notes Payment Account no later than 9:00 am (9:00) of the Business Day
immediate preceding each Payment Date, if such interest amount is not enough, pay the
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funds in the same order of priority and on a pro rata basis, the shortfall shall be paid in
the following order of priority in the next period:
(1) Transfer to the account as designated by the CCDC, the interest on the Senior Notes
payable on the upcoming Payment Date which has been transferred to the Notes
Payment Account on the last Trust Distribution Date;
(2) Transfer to the account as designated by the CCDC, the balance in the Trust
Payment Account as returns on the Subordinated Notes.
Prior to the occurrence of the Event of Default, the Trustee shall instruct the Fund
Custodian to make payments in the following order of priority with the interest amount
in the Notes Payment Account no later than 9:00 am (9:00) of the Business Day
immediately preceding each Payment Date, if such interest amount is not enough, pay
the funds in the same order of priority and on a pro rata basis, the shortfall shall be paid
in the following order of priority in the next period:
(1) transfer to the account as designated by the CCDC an amount enough to pay all the
payables stipulated in the Section 9.12.1.1 of the Trust Agreement;
(2) transfer to the account as designated by the CCDC an amount until the sum amount
transferred is equal to the aggregated Outstanding Principal Balance of all the
Senior Notes;
(3) transfer to the account designated by CCDC an amount until the sum amount
transferred is equal to the aggregated Outstanding Principal Balance of all the
Subordinated Notes;
Upon or after the occurrence of the Event of Default, the Trustee shall instruct the
Fund Custodian to make payments in the following order of priority with the interest
amount in the Notes Payment Account at no later than 9:00 am (9:00) of the Business
Day immediately preceding each Payment Date, if such interest amount is not enough
to pay off, the deficiencies will be paid next time:
(1) transfer to the account as designated by the CCDC, the interest on the Senior Notes
payable on the upcoming Payment Date which has been transferred to the Notes
Payment Account on the last Trust Distribution Date;
(2) transfer to the account as designated by the CCDC, an amount until the sum amount
transferred is equal to the aggregated Outstanding Principal Balance of all the
Senior Notes;
(3) transfer to the account as designated by CCDC an amount until the sum amount
transferred is equal to the aggregated Outstanding Principal Balance of all the
Subordinated Notes;
(4) transfer to the account as designated by CCDC all remaining funds, if any, as
returns on the Subordinated Notes.
I. Use of the Funds in the Expense Account
On each Payment Date prior to occurrence of the Event of Default, the Fund
Custodian shall, under the transfer instructions of the Trustee, make payments with the
funds in the Expense Account in the following order of priority, if the amount available
is not enough to make payments as follows, the deficiencies shall be paid next time:
(1) in the same order of priority, and on a pro rata basis (if the funds in the Expense
41
Account are not enough to cover all the items in this provision), pay the Service
Fees of the Trustee, the Fund Custodian, the Paying Agent, the Rating Agencies (if
any), the Auditor (if any), the Back-up Servicer (if any) to such entities respectively,
and pay the Reimbursable Expenses (to the extent of the Maximum of Priority
Expense Payment) of to the aforementioned parties and the Servicer;
(2) pay the Service Fees to the Servicer;
(3) in the same order of priority, and on a pro rata basis (if the funds in the Expense
Account are not enough to cover all the items in the same order of priority), pay
the part of the Reimbursable Expenses in excess of the Maximum of Priority
Expense Payment payable to the Trustee, the Servicer, the Fund Custodian, the
Paying Agent, the Rating Agencies (if any), the Auditor (if any) and the Back-up
Servicer (if any).
On each Payment Date upon or after the occurrence of the Event of Default, the
Fund Custodian shall, under the transfer instructions by the Trustee, make payments
with the amount in the Expense Account, if the amount available is not enough to cover
such payments, the deficiencies will be paid during the next period in the following
order of priority:
(1) in the same order of priority, and on a pro rata basis (if the funds in the Expense
Account are not enough to cover all the items in this provision), pay the Service
Fees payable to the Trustee, the Fund Custodian, the Paying Agent, the Rating
Agencies (if any), the Auditor (if any) and the Back-up Servicer (if any), and the
Reimbursable Expenses of the aforesaid aforementioned parties and the Servicer;
(2) pay the Service Fees to the Servicer.
6. Credit Enhancement Measures
Credit enhancement is the basis of securitization transaction. It protects the
investors when the Asset Pool quality deteriorates. Internal credit enhancement is
adopted in this securitization, which means credit enhancement measures without
external institution involved in the securitization transaction. Internal enhancement
measures in this transaction include:
A. Multi-Tranche Design
The Notes are divided into Senior Notes and Subordinated Notes.
For each payment, the payment of principal and interest on the Subordinated Notes
ranks below the payment of principal and interest on the Senior Notes, thus creating
credit support for the Senior Notes and achieving the purpose of credit enhancement.
B. Reserve Accounts
In this transaction, the following reserve accounts have been established in order
to enhance the protection of principal and interest payment of Notes:
(A) Liquidity Reserve Account
42
The Liquidity Reserve Account s a level 1 sub-account under the Trust Account,
the funds in which will be used to fill up the deficiency of amount for paying certain
items under Section 9.5.1 of the Trust Agreement.
The funds in such account are from the Trust Property, and the Required Liquidity
Reserve Amount, for each Trust Distribution Date, is equal to one per cent (1%) of the
aggregation of the Outstanding Principal Balance of all the Mortgage Loans in the Asset
Pool as of the end of the Collection Period before such Trust Distribution Date.
On each Trust Distribution Date before the ocurrence of any Event of Default, the
Fund Custodian shall, under the instructions of the Trustee, make the payment with the
funds in the Liquidity Reserve Account in the following order of priority:
(1) Transfer the part of amount in excess of the Required Liquidity Reserve
Amount into the Income Sub-account;
(2) Transfer into the Income Sub-account a certain amount equivalent to the
deficiencies (the deficiencies after the excess amount has been transferred
according to the Section 9.8.1 item (1) of the Trust Agreement) of the payable
amount stipulated in the Section 9.5.1 item (1) through item (4) of the Trust
Agreement;
(3) Keep the remaining funds in the Liquidity Reserve Account.
After the principal of Senior Notes is paid in full or after the occurrence of any
Event of Default, the Trustee shall instruct the Fund Custodian to transfer all funds in
the Liquidity Reserve Account at the time into the Income Sub-account.
(B) Commingle Reserve Account
The Commingle Reserve Account is a level 1 sub-account under the Trust Account,
the funds in which will be used to cover the commingle risk.
When the Servicer does not have any of the Required Ratings from the Rating
Agencies, the Servicer shall transfer into the Commingle Reserve Account an amount
equal to the Commingle Reserve Amount in five (5) Business Days.
The Commingle Reserve Account is equal to the amount of Collections of such
Collection Period(s) where the Servicer expects to transfer the services to the Back-up
Servicer or Successor Servicer, but shall be no less than the amount of receivables
during the Collection Period immediately after the Servicer loses any of the Required
Ratings from the Rating Agencies.
If the Trust Property commingles with the own property of the Servicer, the Trustee
shall instruct the Fund Custodian to transfer the amount equal to the amount of the
commingled property (but limited to the amount of Collections actually generated from
the Asset Pool) from the Commingle Reserve Account, to the extent of the account
balance of such Commingle Reserve Account, to the Income Sub-account and/or the
Principal Sub-account correspondingly under the Trust Collection Account accordingly
43
on the next Trust Distribution Date. If the Servicer distinguishes the commingled Trust
Property from the Servicer’s own property subsequently, the Servicer is entitled to the
corresponding amount of the aforementioned Trust Property, until the amount is equal
to the total amount transferred from the Commingle Reserve Account to the Income
Sub-account and/or the Principal Sub-account.
After the full payment of the principal and interest on the Senior Notes or the Trust
Termination Date, the Trustee shall instruct the Fund Custodian to transfer all the funds
in the Commingle Reserve Account by that time to the account designated by the
Servicer as Special Trust Benefit.
(C) Service Transfer and Notice Reserve Account
The Service Transfer and Notice Reserve Account a level 1 sub-account under the
Trust Account, the balance in which will be used to pay for the specific expenses of
replacing the Servicer and/or sending Right Perfection Notice.
The funds in such account are from the Trust Property, and the Required Service
Transfer and Notice Reserve Amount is (a) zero (0), when the Servicer has all of the
Required Ratings; (b) the combination of Estimated Notice Fee and Estimated Service
Transfer Fee, when the Servicer loses any of the Required Ratings given by the Rating
Agencies; (c) Estimated Notice Fee will be zero (0) after notice expense is paid off and
Estimated Service Transfer Fee will be zero (0) after service transfer expense is paid
off.
At the time when the Servicer transfers its service to the Back-up Servicer or the
Successor Servicer under the provisions of the Servicing Agreement, the Trustee shall
instruct the Fund Custodian to pay the amount equal to the Estimated Service Transfer
Fees from the Service Transfer and Notice Reserve Account to the account of the Back-
up Servicer or the Successor Servicer (if applicable) on the next Trust Distribution Date.
On each Trust Distribution Date, if the amount of funds in the Service Transfer
and Notice Reserve Account exceed the Required Service Transfer and Notice Reserve
Amount, the Fund Custodian shall, under the distribution instructions of the Trustee,
transfer such excess amount to the Income Sub-account.
On any day after the occurrence of item (a) through item (d) of the Right Perfection
Event, if the Servicer, the Back-up Servicer, the Successor Servicer, or the Trustee is
required to deliver Right Perfection Notice pursuant to Section 6 of the Trust Agreement,
and the Trustee instructs the Fund Custodian to pay the amount, to the extent of the
account balance of the Service Transfer and Notice Reserve Account, and equal to the
Estimated Notice Fees from the Service Transfer and Notice Reserve Account to the
accounts of the Servicer (or the Back-up Servicer, the Successor Servicer, or the Trustee,
as applicable to the parties performing the obligation of Right Perfection Notice) on the
next Trust Distribution Date for the payment of the expenses of sending the Right
Perfection Notice.
After the principal and interest on the Senior Notes has been paid in full, the Fund
44
Custodian shall, under the distribution instructions of the Trustee, transfer all the
remaining funds (if any) in the Service Transfer and Notice Reserve Account into the
Income Sub-account under the Trust Collection Account.
(D) Tax Reserve Account
The Tax Reserve Account is a level 1 sub-account under the Trust Account, the
balance in which will be used to pay for the taxes borne by the Trust Property.
According to the PRC Laws, the taxes and fees related to the Trust are paid by the
Trustee; the Trustee shall instruct the Fund Custodian to make payments in the
following order of priority with the funds in the Tax Reserve Account:
(1) pay the taxes due and payable by the Trust at that time;
(2) keep the remaining funds in the Tax Reserve Account.
After all the payable taxes of the Trust are paid off or the Trust terminates, the
Trustee shall instruct the Fund Custodian to transfer the funds in the Tax Reserve
Account to the Income Sub-account.
(E) Commingle Reserve Account
If the Trust Property commingles with the Servicer’s own property, the Trustee
shall instruct the Fund Custodian to transfer the amount equal to the amount of the
commingled property (but limited to the amount of Collections actually generated from
the Asset Pool) from the Commingle Reserve Account, to the extent of the account
balance of such Commingle Reserve Account, to the Income Sub-account and/or the
Principal Sub-account accordingly (if the amount that shall be transferred, respectively,
to the Income Sub-account and the Principal Sub-account cannot be distinguished, then
transfer all of the amount to the Principal Sub-account), on the next Trust Distribution
Date. If the Servicer distinguishes the commingled Trust Property from the Servicer’s
own property subsequently, the Servicer is entitled to the corresponding amount from
the aforementioned Trust Property, until the amount is equal to the total amount
transferred from the Commingle Reserve Account to the Income Sub-account and/or
the Principal Sub-account.
After the full payment of the principal and interest of the Senior Notes or the
Servicer reacquire all the Required Ratings or after the Trust Termination Date, the
Trustee shall instruct the Fund Custodian to transfer all the funds in the Commingle
Reserve Account at the time to the account designated by the Servicer as Special Trust
Benefit.
C. Credit Trigger Mechanisms
Two credit trigger mechanisms are employed in this transaction, including the
Accelerated Payment Event related to the performance ability of the entities involved,
45
and the Event of Default related to the payment of the Notes; once a credit event is
triggered, the Underlying Asset cash flow payment mechanism will be rearranged.
D. Over-collateralization
As for this Notes, the Initial Pool Balance is RMB 347,861,87 ten thousand Yuan,
the amount of the Senior Notes is RMB 298,000.00 ten thousand Yuan, the amount of
the Subordinated Notes is RMB 39,000.00 ten thousand Yuan. The ratio of the Senior
Notes amount to the Initial Pool Balance is 85.67%, ratio of the sum amount of the
Senior Notes and the Subordinated Notes to the Initial Pool Balance is 96.88%. The
Asset Pool over-collateralization is protective for the payment of the principal and
interest of the Senior Notes.
7. Meeting of Noteholders
A. Constitution
Each class of the Noteholders respectively constitutes the Meeting of Noteholders
of such class respectively. The Noteholders who have acquired the Notes of the
corresponding class by purchasing the Notes issued by the Issuer or by purchasing the
Notes of the related class will automatically become the members of the Meeting of
Noteholders of such class. Specifically, the Meeting of Senior Noteholders consists of
the Senior Noteholders; the Meeting of Subordinated Noteholders, consists of the
Subordinated Noteholders, respectively.
B. Convening of the Meeting
The Meeting of Noteholders is unscheduled meeting, the Meetings of Noteholders
of each class shall participate in the meeting altogether, vote in different classes to
decide. The Meeting of Noteholders shall be convened by the Trustee. The Trustee shall
convene the Meeting of Noteholders when one of the following events occurs:
(1) The Trust is terminated in advance;
(2) To approve the proposal related to amending the rights of the Noteholders or
the basic features of the Notes, no matter whether such rights of the
Noteholders or the characteristics of the such Notes are based on the
Transaction Documents or other documents, the issues specifically includes
but shall not be limited to: changing the priorities of the Collection distribution
set forth in Section 9 of Trust Agreement, reducing or canceling the principal
amount or the interest rate, changing the payment currency for the Note,
modifying the number of votes needed for approving certain Unanimous
Consent Matters or Special Matters and other proposals;
(3) The Trustee resigns, the Trustee Termination Event occurs, the Servicer
46
Termination Event occurs, or the Fund Custodian Termination Events occurs,
the Trustee, the Servicer or the Fund Custodian shall be replaced according to
the Transaction Documents;
(4) Decide the appointment issues of the Back-up Servicer under the Trust;
(5) Release or exempt any responsibility and obligation that the Trustee was
supposed to bear according to any Transaction Document;
(6) The termination or material amendment, correction, supplement of the Trust
Agreement or other Transaction Documents, excluding the modification which
is minor technical modification, or which is made according to the mandatory
requirements of the applicable PRC Laws;
(7) Upon the occurrence of any item within item (h) through item (k) of the
Accelerated Payment Event, decide whether to declare the Accelerated
Payment Event has occurred or not; or upon the occurrence of any item within
item (d) through item (e) of the Event of Default, decide whether or not to
declare the Event of Default has occurred;
(8) After the occurrence of the Event of Default, decide whether to dispose of all
or part of the Trust Property by selling, transferring and other means.
(excluding requiring the Settlor to Repurchase the Ineligible Asset or accepting
the Settlor’s Clean-up Call according to Section 4 and Section 5 of Trust
Agreement and liquidating the Trust Property according to Section 10.3 of
Trust Agreement), decide whether to declare the Notes will due immediately
and pay the principal and interest or not;
(9) Approve the liquidation plan of the Non-cash Trust Property when conducting
the Trust liquidation;
(10) Increase the Service Fees for the Trustee or the Servicer;
(11) Authorize the Trustee to execute all necessary documents and to take all
necessary actions or matters, in order to perform the resolutions by the Meeting
of Noteholders;
(12) Select and appoint the representative (no matter whether it is a Noteholder or
not), authorize such representative to perform the resolutions by the Meeting
of Noteholders;
(13) Supervise and review the Trustee’s and each intermediary agency’s
management, and revenue and expenditure conditions of the Trust Property,
and is entitled to require the Trustee and each intermediary agency to make
explanation about the related conditions;
(14) Other matters that shall be decided by the Meeting of Noteholders according
to the Transaction Documents.
In terms of the Meeting of Noteholders made up of the Noteholders in each class,
47
the Noteholders who independently or jointly hold 10% or more Outstanding Principal
Balance of the Notes in such class, for the purposes of the Noteholders’ mutual
beneficial matter, such Noteholders can request the Trustee to convene the Meeting of
Noteholders. The Noteholders who propose the Trustee to convene the meeting shall
submit written application for convening the meeting, such application shall contain the
proposal matters and reasons.
When the Noteholders apply for convening the Meeting of Noteholders according
to Trust Agreement, the Trustee refuse or cannot convene for other reasons, the Trustee
shall inform such Noteholders in writing within five (5) business days after submitting
the written application by the Noteholders.
Within ten (10) Business Days after the Noteholders submit the written application
according to Trust Agreement, if the Trustee has not convened or cannot convene for
other reasons, the Noteholders who independently or jointly hold 10% or more
Outstanding Principal Balance of the Notes in such class can convene a meeting in their
own initiative after filing with the PBOC, and inform the Trustee to attend. When the
Meeting of Noteholders is having the meeting, the Trustee shall attend the meeting and
accept the inquiry of the Meeting of Noteholders.
When the Trustee propose to convene or the Noteholders take the initiative to
convene the Meeting of Noteholders, the convener(s) shall disclose the time, location,
the form of the meeting, matters to be considered, agenda, the voting manner and other
relevant information at CFAE, the Notes Custodian, the Inter-bank Funding Center and
other medias or channels (if any) appointed by NAFMII at least 30 days before the
meeting, in order to inform all the Noteholders of the related meeting matters. The
Meeting of Noteholders in any class shall not vote and decide the matters to be
considered which have not been disclosed.
C. Voting Right
Each Noteholder present at the meeting has one voting right for every RMB 100
(par value) of the Notes it holds.
The fifth (5th) Business Day before opening the Meeting of Noteholders is the
voting right registration date. At the end of the voting right registration date, the
Noteholders are entitled to attend the Meeting of Noteholders, and enjoy the relevant
voting rights pursuant to the Note it holds. The Noteholders at the end of the voting
right registration date shall be confirmed according to related data information recorded
by the Notes Custodian.
The Noteholders can delegate an agent to attend the Meeting of Noteholders, the
agent shall provide the power of attorney which indicates the authorization scope issued
by the Noteholders to the Trustee, and exercise the voting right within the authorization
scope. Every Noteholder can issue one power of attorney and delegate one agent.
The same Noteholder present at the Meeting of Noteholders, shall not dividedly
48
exercise its voting rights on the same proposal. When the legal persons or other
organizations are the Noteholders, its agent is limited to only one person.
D. Form of the Meeting
The meeting can be held in person or through telecommunication. The Noteholder
can exercise its voting rights in person or through telecommunication.
A Noteholder exercising the voting rights through telecommunication shall be
deemed as attending the Meeting of Noteholders in person. The Noteholder exercising
the voting rights through telecommunication shall deliver a declaration of intention for
exercising its voting rights (referred to as Declaration of Intention hereinafter) to the
Trustee one (1) Business Days before the beginning of the Meeting of Noteholders. If
the Noteholder delivers two or more versions of Declaration of Intention, the latest
version shall prevail unless the latest version does not meet the aforementioned time
requirement. After the Noteholder exercises the voting right through
telecommunication, if it plans to attend the Meeting of Noteholders in person, then no
later than one (1) Business Day before the beginning of the Meeting of Noteholder, it
shall revoke such Declaration of Intention for exercising the voting right in the same
method of exercising the voting right; If the Noteholder does not revoke the Declaration
of Intention in a timely manner, then the method of exercising the voting right through
telecommunication shall prevail. If the Noteholder exercises the voting right through
telecommunication and delegates an agent to attend the Meeting of Noteholders
simultaneously, then the agent’s method of attending the meeting and exercising voting
right prevail.
E. Unanimous Consent Matters
The resolutions regarding the matters under item (1) through item (2) of Section
19.2.1 (referred to as Unanimous Consent Matters hereinafter) in Trust Agreement
made by the Meeting of Noteholders of each class, shall be approved by all Noteholders
of such class attending the meeting. and all the Noteholders which hold 100% of the
Outstanding Principal Balance of such class of Notes shall attend the meeting.
F. Special Matters
The resolutions regarding to the matters in item (3) through item (9) of Section
19.2.1 (referred to as Special Matters hereinafter) in Trust Agreement which are
generated from the Meeting of Noteholders made up of the Noteholders in each class,
shall be approved by 75% or more of the total number of the voting rights enjoyed by
Noteholders attending in such class, and the Noteholders which independently or jointly
hold 75% or more of the Note Outstanding Principal Balance in such class must attend
the meeting
49
G. Ordinary Matters
The Matters in addition to the Unanimous Consent Matters and Special Matters
are Ordinary Matters. The resolutions regarding to the Ordinary Matters which are
generated from the Meeting of Noteholders made up of the Noteholders in each class,
shall be approved by 50% or more of the total number of the voting rights enjoyed by
Noteholders attending in such class, and the Noteholders which independently or jointly
hold 50% or more of the Note Outstanding Principal Balance in such class must attend
the meeting.
H. Conflicting Resolutions
If the Meeting of Noteholders of different classes make different resolutions over
the same matter or the resolutions conflict with each other, unless otherwise stipulated
by Trust Agreement, the Meeting shall confirm the effectiveness of the resolutions made
by the Meeting of Noteholders in each class pursuant to the following rules: if the
principal and interest of Class A Note has not been completely paid off, the resolutions
made by the Meeting of Noteholders made up of the Class A Noteholders prevail; when
the principal and interest of Class A Note has been completely paid off, if the principal
and interest of Class B Note has not been completely paid off, the resolutions made by
the Meeting of Noteholders made up of the Class B Noteholders prevail; when all the
principal and interest of Senior Note has been completely paid off, the resolutions made
by the Meeting of Noteholders made up of the Subordinated Noteholders prevail. If the
Meeting of Noteholders of the related class has not generated a resolution over certain
matter, then it shall be deemed as the Meeting of Noteholders of such class disagree
with the resolution regarding such matter made by the Meeting of Noteholders of other
classes.
I. Acknowledgement of the Resolutions and the Consent of the Third Party
If the resolutions of the Meeting of Noteholders made up of the Noteholders of
any class damage the rights of Noteholders of other classes, then the resolutions shall
be acknowledged by the Meeting of Noteholders made up of the Noteholders of such
other classes.
The acknowledgement mentioned in Section 19.9.1 of Trust Agreement, shall be
approved by 75% or more of the total number of the voting rights enjoyed by
Noteholders of such class attending the meeting, and the Noteholders which
independently or jointly hold 75% or more of the Note Outstanding Principal Balance
of such class must attend the meeting.
In terms of the third party other than the Noteholders, without the written approval
of such third party, the resolutions generated from the Meeting of Noteholders shall not
damage such third party’s rights or interest under the Trust in Trust Agreement or other
50
Transaction Documents.
J. Performance of the Resolutions
The Meeting of Noteholders’ resolutions shall be performed by the person
appointed by the Meeting of Noteholders. The Meeting of Noteholders can authorize
the Trustee to perform the Meeting of Noteholders’ resolutions.
The person appointed by the Meeting of Noteholders can represent the
Noteholders to conduct the action of litigation or actions other than litigation related to
the Trust for all the Noteholder’s benefit.
The authority, fees, calculation method of the fees and the payment periods and
other matters of the person appointed by the Meeting of Noteholders according to
Section 19.10 of Trust Agreement, shall be decided simultaneously when the Meeting
of Noteholders appoints such person.
K. Meeting Minutes
The Meeting of Noteholders shall take meeting minutes for the resolutions, the
convener, the Trustee shall sign and seal on the meeting minutes. The meeting minutes,
the records for the attendance by the Noteholders and the power of attorney for agents
will be kept together by the Trustee and retained for a period of no less than fifteen (15)
years after the Trust Termination Date.
L. Filing and Announcement of the Resolutions
The Trustee shall file with the PBOC any resolutions generated from the Meeting
of Noteholders within ten (10) days after the meeting, and shall disclose the resolutions
at CFAE, the Notes Custodian, the Inter-bank Funding Center and other media or
channels appointed by NAFMII.
8. Cash Flow Table
The following table indicates the collection situations of the cash flow of the loan
plan in the Asset Pool for each reporting period starting from the Cutoff Date, such table
assumes that all loans are repaid promptly and that there is no advance payment or
default. The Principal Receivable in the Current Period is the sum of the total calculated
results of the principal receivables of each individual auto loan in the Asset Pool in the
current period. The Interest Receivable in the Current Period is the sum of the total
calculated results of the interest receivables of each individual auto loan in the Asset
Pool in the current period.
(Unit: RMB Yuan)
51
Repayment
Month
Total Principal
Balance
at the Beginning
of the Period
Principal
Receivable
in the Current
Period
Interest
Receivable
in the Current
Period
Total Principal
Balance
at the End of the
Period
202004 3,478,618,713.98 174,561,386.22 6,517,225.92 3,304,057,327.76 202005 3,304,057,327.76 175,465,677.44 6,320,735.35 3,128,591,650.32 202006 3,128,591,650.32 175,686,802.53 6,099,621.59 2,952,904,847.79 202007 2,952,904,847.79 175,909,455.38 5,876,968.74 2,776,995,392.41 202008 2,776,995,392.41 176,133,660.70 5,652,763.42 2,600,861,731.71 202009 2,600,861,731.71 176,359,426.36 5,426,997.76 2,424,502,305.35 202010 2,424,502,305.35 176,586,768.12 5,199,656.00 2,247,915,537.23 202011 2,247,915,537.23 176,815,694.90 4,970,729.22 2,071,099,842.33 202012 2,071,099,842.33 177,046,219.62 4,740,204.50 1,894,053,622.71 202101 1,894,053,622.71 177,278,354.28 4,508,069.84 1,716,775,268.43 202102 1,716,775,268.43 177,512,109.64 4,274,314.48 1,539,263,158.79 202103 1,539,263,158.79 177,747,499.38 4,038,924.74 1,361,515,659.41 202104 1,361,515,659.41 177,984,534.62 3,801,903.66 1,183,531,124.79 202105 1,183,531,124.79 159,712,375.69 3,563,208.61 1,023,818,749.10 202106 1,023,818,749.10 153,310,601.86 3,324,663.75 870,508,147.24 202107 870,508,147.24 144,444,390.73 3,086,535.38 726,063,756.51 202108 726,063,756.51 137,381,494.09 2,849,218.75 588,682,262.42 202109 588,682,262.42 109,505,600.08 2,611,938.07 479,176,662.34 202110 479,176,662.34 76,951,799.21 2,377,274.27 402,224,863.13 202111 402,224,863.13 44,341,463.74 2,147,391.84 357,883,399.39 202112 357,883,399.39 44,099,016.26 1,923,598.13 313,784,383.13 202201 313,784,383.13 43,808,617.75 1,698,456.10 269,975,765.38
202202 269,975,765.38 43,411,361.21 1,471,991.56 226,564,404.17
202203 226,564,404.17 41,130,676.11 1,244,228.89 185,433,728.06
202204 185,433,728.06 38,194,364.82 1,025,757.22 147,239,363.24
202205 147,239,363.24 34,698,954.41 819,935.92 112,540,408.83
202206 112,540,408.83 31,559,011.95 628,968.88 80,981,396.88
202207 80,981,396.88 27,888,711.01 453,487.64 53,092,685.87
202208 53,092,685.87 24,828,337.35 299,210.65 28,264,348.52
202209 28,264,348.52 18,294,833.09 162,988.36 9,969,515.43
202210 9,969,515.43 9,392,163.93 60,558.50 577,351.50
202211 577,351.50 323,257.05 5,604.26 254,094.45
202212 254,094.45 107,583.30 2,514.55 146,511.15
202301 146,511.15 77,314.79 1,431.15 69,196.36
202302 69,196.36 39,303.44 645.79 29,892.92
202303 29,892.92 29,892.92 275.44 0.00
Note: Early repayment, delinquency, default and other uncertainties are not taken into account in the calculation of
cash flow above.
52
Chapter 3 General Information of the Underlying Assets
The following is the overall statistics of the Asset Pool as of 24:00 on March 31,
2020.
1. Eligibility Criteria
Eligibility Criteria means, the following criteria to which each Mortgage Loan and
the Security Right and Interest thereof should conform, as of the Cutoff Date and the
Trust Property Delivery Date (or other date otherwise stipulated hereinafter):
A. Criteria for the Borrower (for each Mortgage Loan)
(a) The Borrower shall be a Chinese citizen or a permanent resident, and a natural
person who is at least eighteen (18) years of age on the loan grant date;
(b) At the time the Mortgage Loan is granted, the Borrower shall not be an
employee who has a labor contract with the Originator;
(c) the Borrower has no occurred default on its payment obligations (except any
delay in payment as provided in item (j) of the Eligibility Criteria) or on any
other major obligations known to the Originator under the Mortgage Loan
Agreement or any other relevant documents, which has not been remedied;
B. Criteria for the Mortgage Loan
(d) As of the Cutoff Date, with accordance to the five-category loan classification
system applicable to the auto loan business of the Originator, each Mortgage
Loan is a normal loan;
(e) The Mortgage Loan has been disbursed in full, and the whole of the outstanding
amount (including but not limited to the principal, interest, and other payables)
under a Mortgage Loan Agreement has been included in the Asset Pool, and,
the Borrower has authorized the Originator a right of recoupment, or such right
of recoupment has been stipulated in the Mortgage Loan Agreement;
(f) All payable amounts of the Mortgage Loan shall be made in RMB;
(g) As of the Cutoff Date, the Mortgage Loan has not been charged off according
to the standard procedure of the Originator, nor is it subject to restructuring or
extension;
(h) The applicable law for the Mortgage Loan Agreement is PRC law;
(i) The Mortgage Loan Agreement and the Mortgage Right are legal and valid,
and constitute legal, effective and binding obligations of the Borrower, the
53
creditor and mortgagee, are entitled to make valid claims against the Borrower
under the Mortgage Loan Agreement;
(j) By the Cutoff Date, there is no any delay of each payment scheduled under
each Mortgage Loan Agreement by the Borrower;
(k) As of the Cutoff Date, the account-age of the Mortgage Loan is no shorter than
five (5) months, and the remaining term of the Mortgage Loan is no shorter
than ten (10) months;
(l) Specific repayment plans are provided in the Mortgage Loan Agreement;
(m) The Mortgage Loan Agreement shall provide that the Borrower, the Co-
Borrower or the Mortgagor shall accomplish the registration of the Mortgage
Right in the Mortgage Vehicle at the relevant registration authority in PRC, and
as of the Cutoff Date, the Originator was granted a first priority Mortgage Right
in the Mortgage Vehicle;
(n) As of the disbursement of the Mortgage Loan, the initial loan-to-value ratio is
not greater than eighty per cent (80%) (initial loan-to-value ratio =the amount
of loan under the Mortgage Loan Agreement/value of the Mortgage
Vehicle*100%);
(o) As of the Cutoff Date, the Borrower has paid all the costs and fees relating to
the Mortgage Loan payable by the Borrower, and such payment need not be
refunded to the Borrower by the Originator;
(p) Unless the Borrower prepays all the payable amounts (including existing and
prospective, actual and contingent) under relevant Mortgage Loan Agreement,
the Borrower has no right to unilaterally terminate the Mortgage Loan
Agreement;
(q) The Originator and the relevant Borrower have not entered into any agreement
relating to the Mortgage Loan other than the Mortgage Loan Agreement
(except for agreement on direct debiting authorization relating to such
Mortgage Loan);
(r) There is no provision in the Mortgage Loan Agreement prohibiting or
restricting the transfer of the Mortgage Loan and the Security Right and Interest,
and the Originator does not need the consent of the Borrower, Mortgagor,
Guarantor or any other entity to entrust or transfer in whole or in part of the
Mortgage Loan and the Security Right and Interest;
54
(s) As of the Cutoff Date, the Originator has not waived any of its material right
under the Mortgage Loan Agreement or the Mortgage Right, except for the
right to liquidated damages in case of prepayment;
(t) The Originator has performed and abided by the Mortgage Loan Agreement
and the clauses therein relating to the Mortgage Right;
(u) As of the Cutoff Date, for such Mortgage Loan, there is no unresolved dispute
between the Originator and the Borrower regarding the payable amount,
payment due time, terms of payment or any other aspect of the Mortgage Loan;
nor is there any litigation, arbitration, bankruptcy or enforcement proceeding
ongoing involving the Mortgage Loan;
(v) As of the Cutoff Date, aside from the statutory right of offset, the relevant
Borrower is not entitled to claim for any deduction or exemption of the
payables under the Mortgage Loan;
C. Criteria for the Mortgage Vehicle
(w) At the completion of registration of the mortgage over the Mortgage Vehicle
with the relevant registration authority in PRC, the related Mortgage Vehicle
had been insured according to the customary business standard, such insurance
policies include but are not limited to property insurance acquired in the name
of the Borrower but under which the Originator is the primary beneficiary
(except for third-party liability insurance);
D. Criteria for the Grant and Selection of the Mortgage Loan
(x) The Mortgage Loan is disbursed under the standard credit procedure of the
Originator and other relevant policies, practices, and procedures on mortgage
loans;
(y) The Borrower or Mortgagor’s ability to assign or otherwise dispose the
obligations under the Mortgage Loan Agreement or to dispose the Mortgage
Vehicle thereunder without consent of the Originator is prohibited or restricted
by the PRC Laws or the Mortgage Loan Agreement.
2. Number of Loans and Loan Amount
Basic Information Amount/Number Unit
Outstanding Principal Balance 3,478,618,713.98 RMB Yuan
Number of Borrowers 69,507 -
Number of Loans 69,512 -
55
Basic Information Amount/Number Unit
Highest Outstanding Single Loan
Principal Balance 175,429.29 RMB Yuan
Lowest Outstanding Single Loan
Principal Balance 13,888.96 RMB Yuan
Average Outstanding Single Loan
Principal Balance 50,043.43 RMB Yuan
Average Outstanding Principal
Balance of Each Borrower 50,047.03 RMB Yuan
Contract Amount 4,686,674,180.03 RMB Yuan
Highest Single Loan Contract
Amount 203,840.00 RMB Yuan
Lowest Single Loan Contract
Amount 25,000.00 RMB Yuan
Average Single Loan Contract
Amount 67,422.52 RMB Yuan
3. Loan Term
Basic Information Amount/Number Unit
Weighted Average Contract Term 27.83 month
Weighted Average Remaining
Term 20.92 month
Weighted Average Age 6.91 month
Longest Remaining Loan Term of
Single Loan 36 month
Shortest Remaining Loan Term
Single Loan 12 month
4. Loan Interest
Basic Information Amount/Number Unit
Weighted Average Annual Interest
Rate 2.26 %
Highest Annual Interest Rate of
Single Loan 12.85 %
Lowest Annual Interest Rate of
Single Loan 0.00 %
5. Concentration
Basic Information Amount/Number Unit
Concentration Ratio of Borrowers with
the 10 Largest Loan Amount 0.05 %
56
Basic Information Amount/Number Unit
Concentration Ratio of Borrowers with
the 20 Largest Loan Amount 0.09 %
6. Mortgage Vehicles
Basic Information Amount/Number Unit
Total Original Appraisal Value of
Mortgage Vehicles 7,803,986,400.00 RMB Yuan
Weighted Average Initial Loan-To-
Value Ratio 62.68 %
Percentage of New Mortgage
Vehicles 100.00 %
7. Borrowers
Basic Information Amount/Number Unit
Weighted Average Age (personal) 32.77 Years Old
Percentage of 30-to-40-year-old
Borrowers 32.59 %
Weighted Average Annual Income
of Borrowers 111,625.31 RMB Yuan
Weighted Average Income to Debt
Ratio of Borrowers 3.54 Times
8. Purpose of Loans
All Mortgage Loans are for the purpose of buying a car by an individual customer.
Description of the Indicators:
1. the weighted average date above is calculated as follows:
Weighted Average Contract Term=∑ pini=1 ∗ ti/ ∑ pi
ni=1 , where pi is the Outstanding Principal
Balance of each loan, ti is the contract term of each loan;
Weighted Average Age=∑ pini=1 ∗ si/ ∑ pi
ni=1 , where pi is the Outstanding Principal Balance of
each loan, si is the account age of each loan;
Weighted Average Remaining Term=∑ pini=1 ∗ ri/ ∑ pi
ni=1 , where pi is the Outstanding Principal
Balance of each loan, ri is the remaining term of each loan;
Weight Average Annual Interest Rate=∑ pini=1 ∗ Ri/ ∑ pi
ni=1 , where pi is the Outstanding
Principal Balance of each loan, Ri is the interest rate of each loan;
Weighted Average Initial Loan-To-Value Ratio=∑ pini=1 ∗ LTVi/ ∑ pi
ni=1 , where pi is the
57
Outstanding Principal Balance of each loan with mortgage, LTVi is the initial LTV of each loan
with mortgage;
Weighted Average Age=∑ pini=1 ∗ Ni/ ∑ pi
ni=1 , where pi is the Outstanding Principal Balance of
each loan, Ni is the age of each borrower;
Weighted Average Annual Income of Borrowers=∑ pini=1 ∗ Ti/ ∑ Ti
ni=1 , where pi is the
Outstanding Principal Balance of each loan, Ti is the annual income of each borrower, which is
self-claimed when the Borrowers apply for loans from Originator. Such annual income only
means the annual income of Borrower himself/herself, does no include the annual income
information of its security provider or other income information of its family;
Weighted Average Income to Debt Ratio of Borrowers=∑ pi ∗ Tini=1 ∗ ri/（∑ Pi
ni=1 ∗ 12, where pi
is the Outstanding Principal Balance of each loan, ri is the remaining term of each loan, Ti is the
annual income of each borrower.
2. There may be a nuance between the sum of detailed figures and the total figure due to rounding.
58
Chapter 4 Distribution Information of the Asset Pool
As of 24:00 on March 31, 2020, the classified statistics of the Asset Pool are as follows:
1. Statistics of the Asset Pool
A. Amount of Loan Contract
Contract Amount
Outstanding
Principal Balnce
(RMB Yuan)
Percentage
of
Outstanding
Principal
Balance
Contract Amount
(RMB Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
0-50,000(included) 496,761,242.60 14.28% 684,192,538.20 14.60% 15,024 21.61% 33,064.51 52.89%
50,000-
100,000(included) 2,828,447,431.38 81.31% 3,807,305,772.98 81.24% 52,838 76.01% 53,530.55 63.73%
100,000-
150,000(included) 141,770,327.80 4.08% 180,366,428.85 3.85% 1,565 2.25% 90,588.07 74.85%
150,000-
200,000(included) 11,466,020.39 0.33% 14,605,600.00 0.31% 84 0.12% 136,500.24 74.75%
Above 200,000 173,691.81 0.00% 203,840.00 0.00% 1 0.00% 173,691.81 80.00%
Total 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
59
B. Outstanding Principal Balance of Loan
Outstanding
Principal Balance
Outstanding
Principal Balnce
(RMB Yuan)
Percentage of
Outstanding
Principal
Balance
Contract
Amount (RMB
Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
0-50,000(included) 1,600,133,316.49 46.00% 2,236,337,749.83 47.72% 40,306 57.98% 39,699.63 56.54%
50,000-
100,000(included) 1,832,093,027.80 52.67% 2,394,826,444.10 51.10% 28,807 41.44% 63,598.88 67.80%
100,000-
150,000(included) 43,014,205.78 1.24% 51,471,386.10 1.10% 378 0.54% 113,794.20 71.36%
150,000-
200,000(included) 3,378,163.91 0.10% 4,038,600.00 0.09% 21 0.03% 160,864.95 78.86%
Total 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
C. Loan Term
Contract Term
Outstanding
Principal Balnce
(RMB Yuan)
Percentage of
Outstanding
Principal
Balance
Contract
Amount (RMB
Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
12-23 months
(included) 165,118,357.78 4.75% 228,626,730.29 4.88% 4,618 6.64% 35,755.38 59.49%
24-35 months
(included) 2,170,077,490.91 62.38% 3,019,979,612.14 64.44% 45,256 65.11% 47,951.16 59.30%
36-48 months
(included) 1,142,605,753.92 32.85% 1,436,738,357.60 30.66% 19,625 28.23% 58,221.95 69.55%
60
Contract Term
Outstanding
Principal Balnce
(RMB Yuan)
Percentage of
Outstanding
Principal
Balance
Contract
Amount (RMB
Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
Above 48 months 817,111.37 0.02% 1,329,480.00 0.03% 13 0.02% 62,854.72 70.08%
Total 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
D. Remaining Term of Loan
Remaining Term of
Loan
Outstanding
Principal Balnce
(RMB Yuan)
Percentage of
Outstanding
Principal
Balance
Contract
Amount (RMB
Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
12-18 months 1,653,465,880.30 47.53% 2,387,632,982.84 50.95% 36,959 53.17% 44,737.84 59.61%
19-24 months 781,654,076.95 22.47% 1,020,097,390.01 21.77% 15,349 22.08% 50,925.41 59.77%
25-30 months 775,778,115.39 22.30% 971,318,408.83 20.73% 12,981 18.67% 59,762.58 69.96%
31-37 months 267,720,641.34 7.70% 307,625,398.35 6.56% 4,223 6.08% 63,395.84 68.99%
总计 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
61
E. Repayment Method of Loan
Repayment
Method
Outstanding
Principal Balnce
(RMB Yuan)
Percentage of
Outstanding
Principal
Balance
Contract
Amount (RMB
Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
Equal Installment 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
Total 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
F. Loan Age
Age of Loans
Outstanding
Principal Balnce
(RMB Yuan)
Percentage of
Outstanding
Principal
Balance
Contract
Amount (RMB
Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
Below 180 (included) 1,017,491,362.23 29.25% 1,273,332,898.73 27.17% 19,894 28.62% 51,145.64 61.53%
181-360 Days 2,302,213,246.51 66.18% 3,161,727,399.43 67.46% 45,833 65.94% 50,230.47 63.07%
361-540 Days 154,995,532.27 4.46% 244,203,441.87 5.21% 3,653 5.26% 42,429.66 64.64%
541-720 Days 2,786,182.09 0.08% 5,446,700.00 0.12% 111 0.16% 25,100.74 48.64%
Above 720 Days 1,132,390.88 0.03% 1,963,740.00 0.04% 21 0.03% 53,923.38 68.56%
Total 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
62
G. Annual Interest Rate
Interest Rate of
Mortgage Loans
Outstanding
Principal Balnce
(RMB Yuan)
Percentage of
Outstanding
Principal
Balance
Contract
Amount (RMB
Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
0-1% (Exclusive) 2,490,743,124.93 71.60% 3,448,633,305.98 73.58% 53,335 76.73% 46,699.97 58.50%
1-2% (Exclusive) 2,928,517.12 0.08% 3,817,590.00 0.08% 52 0.07% 56,317.64 65.55%
2-3% (Exclusive) 8,421,573.11 0.24% 11,222,880.00 0.24% 150 0.22% 56,143.82 66.67%
3-4% (Exclusive) 13,453,427.44 0.39% 17,432,649.60 0.37% 210 0.30% 64,063.94 71.42%
4-5% (Exclusive) 14,802,142.77 0.43% 18,510,870.60 0.39% 259 0.37% 57,151.13 65.08%
5-6% (Exclusive) 62,012,683.47 1.78% 76,202,682.80 1.63% 1,016 1.46% 61,036.11 70.95%
6-7% (Exclusive) 278,817,617.82 8.02% 347,427,351.90 7.41% 3,941 5.67% 70,747.94 74.56%
7-8% (Exclusive) 383,279,816.65 11.02% 489,363,131.45 10.44% 6,731 9.68% 56,942.48 72.55%
8-9% (Exclusive) 67,118,232.27 1.93% 81,796,867.40 1.75% 1,251 1.80% 53,651.66 74.92%
9-10%
(Exclusive) 22,570,715.83 0.65% 27,448,722.60 0.59% 369 0.53% 61,167.25 78.90%
Above 10% 134,470,862.57 3.87% 164,818,127.70 3.52% 2,198 3.16% 61,178.74 73.19%
Total 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
63
H. Type of Interest Rate
Type of Interest
Rate
Outstanding
Principal Balnce
(RMB Yuan)
Percentage of
Outstanding
Principal
Balance
Contract
Amount (RMB
Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
Floating Rate 134,407,711.45 3.86% 164,744,527.70 3.52% 2,197 3.16% 61,177.84 73.19%
Fixed Rate 3,344,211,002.53 96.14% 4,521,929,652.33 96.48% 67,315 96.84% 49,680.03 62.25%
Total 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
I. Security Information
Security
Outstanding
Principal Balnce
(RMB Yuan)
Percentage of
Outstanding
Principal
Balance
Contract
Amount (RMB
Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
Vehicle Mortgage 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
Total 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
J. CBIRC Five-Class Loan Classification
Five-Class Loan
Classification
Outstanding
Principal Balnce
(RMB Yuan)
Percentage of
Outstanding
Principal
Balance
Contract
Amount (RMB
Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
Normal 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
64
Five-Class Loan
Classification
Outstanding
Principal Balnce
(RMB Yuan)
Percentage of
Outstanding
Principal
Balance
Contract
Amount (RMB
Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
Total 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
K. The Longest Overdue Days in the Past
The Longest
Overdue Days
Outstanding
Principal Balnce
(RMB Yuan)
Percentage of
Outstanding
Principal
Balance
Contract
Amount (RMB
Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
0 Day 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
Total 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
65
2. Statistics of Borrowers
A. Age of Borrowers
Age
Outstanding
Principal Balnce
(RMB Yuan)
Percentage of
Outstanding
Principal
Balance
Contract Amount
(RMB Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
18-20 Years old 43,507,080.51 1.25% 60,105,436.20 1.28% 928 1.34% 46,882.63 59.55%
21-25 Years old 747,741,751.44 21.50% 1,053,598,441.95 22.48% 15,861 22.82% 47,143.42 60.80%
26-30 Years old 893,866,147.31 25.70% 1,201,010,859.08 25.63% 17,768 25.56% 50,307.64 62.92%
31-35 Years old 717,872,595.24 20.64% 945,674,920.83 20.18% 13,922 20.03% 51,563.90 63.85%
36-40 Years old 415,726,279.11 11.95% 550,306,464.18 11.74% 8,078 11.62% 51,464.01 63.78%
41-45 Years old 277,869,824.50 7.99% 367,292,890.76 7.84% 5,437 7.82% 51,107.20 62.97%
46-50 Years old 215,700,361.70 6.20% 285,313,783.20 6.09% 4,201 6.04% 51,345.00 62.99%
51-55 Years old 105,989,770.94 3.05% 140,629,676.05 3.00% 2,079 2.99% 50,981.13 62.59%
56-60 Years old 42,582,308.06 1.22% 56,945,812.40 1.22% 838 1.21% 50,814.21 61.66%
61-65 Years old 17,762,595.17 0.51% 25,795,895.38 0.55% 400 0.58% 44,406.49 58.49%
Total 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
66
B. Geographical Distribution of Borrowers
Province Outstanding Principal
Balnce (RMB Yuan)
Percentage of
Outstanding
Principal
Balance
Contract Amount
(RMB Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
Guangdong 394,532,917.85 11.34% 530,479,087.00 11.32% 7,243 10.42% 54,470.93 64.74%
Henan 280,053,737.09 8.05% 380,562,341.83 8.12% 5,747 8.27% 48,730.42 63.24%
Shandong 255,026,075.84 7.33% 348,145,511.54 7.43% 5,440 7.83% 46,879.79 63.03%
Jiangsu 237,104,768.83 6.82% 323,224,559.86 6.90% 4,708 6.77% 50,362.10 61.84%
Sichuan 201,435,856.27 5.79% 268,873,368.49 5.74% 4,169 6.00% 48,317.55 58.09%
Zhejiang 196,146,851.56 5.64% 266,827,558.35 5.69% 3,832 5.51% 51,186.55 60.79%
Hunan 176,380,000.98 5.07% 236,609,352.00 5.05% 3,436 4.94% 51,332.95 62.68%
Hubei 163,592,742.25 4.70% 220,443,142.51 4.70% 3,348 4.82% 48,862.83 61.25%
Hebei 160,732,523.63 4.62% 218,271,929.05 4.66% 3,431 4.94% 46,847.14 61.52%
Yunnan 136,839,619.58 3.93% 181,906,696.98 3.88% 2,694 3.88% 50,794.22 64.34%
Anhui 130,975,704.18 3.77% 179,507,311.90 3.83% 2,802 4.03% 46,743.65 58.90%
Chongqing 122,783,735.22 3.53% 163,900,381.10 3.50% 2,446 3.52% 50,197.77 59.63%
Shaanxi 102,922,837.55 2.96% 136,061,586.21 2.90% 2,032 2.92% 50,651.00 63.16%
Jiangxi 87,495,424.80 2.52% 118,361,107.05 2.53% 1,830 2.63% 47,811.71 61.87%
Guizhou 86,723,496.12 2.49% 114,638,505.70 2.45% 1,679 2.42% 51,651.87 65.77%
Xinjiang 85,746,709.97 2.46% 113,659,905.04 2.43% 1,643 2.36% 52,189.11 65.61%
67
Province Outstanding Principal
Balnce (RMB Yuan)
Percentage of
Outstanding
Principal
Balance
Contract Amount
(RMB Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
Shanxi 84,024,283.91 2.42% 114,646,774.90 2.45% 1,867 2.69% 45,004.97 62.85%
Guangxi 81,968,809.48 2.36% 108,254,219.50 2.31% 1,650 2.37% 49,678.07 63.70%
Fujian 76,415,949.19 2.20% 102,450,108.80 2.19% 1,356 1.95% 56,353.94 64.24%
Inner Mongolia 68,289,246.33 1.96% 92,024,537.00 1.96% 1,308 1.88% 52,208.90 65.67%
Liaoning 64,067,172.23 1.84% 85,587,179.90 1.83% 1,343 1.93% 47,704.52 62.80%
Gansu 59,336,625.62 1.71% 78,223,584.63 1.67% 1,191 1.71% 49,820.84 65.51%
Heilongjiang 53,488,227.15 1.54% 71,950,485.20 1.54% 1,067 1.53% 50,129.55 66.55%
Jilin 38,832,686.22 1.12% 52,104,126.84 1.11% 802 1.15% 48,419.81 66.41%
Shanghai 33,062,232.12 0.95% 45,056,846.40 0.96% 583 0.84% 56,710.52 60.36%
Tianjin 29,455,508.13 0.85% 39,657,535.65 0.85% 571 0.82% 51,585.83 63.19%
Beijing 24,091,335.76 0.69% 32,513,136.10 0.69% 430 0.62% 56,026.36 61.75%
Ningxia 17,587,239.75 0.51% 23,410,007.40 0.50% 355 0.51% 49,541.52 62.79%
Qinghai 12,497,598.01 0.36% 16,677,585.00 0.36% 212 0.30% 58,950.93 67.69%
Hainan 11,469,856.29 0.33% 15,324,657.30 0.33% 208 0.30% 55,143.54 64.44%
Tibet 5,538,942.07 0.16% 7,321,050.80 0.16% 89 0.13% 62,235.30 68.39%
Total 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
68
C. Occupation of Borrowers
Occupation
Outstanding
Principal Balnce
(RMB Yuan)
Percentage of
Outstanding
Principal
Balance
Contract Amount
(RMB Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
Operator 681,616,341.00 19.59% 919,298,657.48 19.62% 13,941 20.06% 48,892.93 62.73%
Professional 479,729,895.27 13.79% 648,031,293.04 13.83% 9,675 13.92% 49,584.49 62.16%
Worker 470,679,427.09 13.53% 631,846,604.11 13.48% 9,941 14.30% 47,347.29 62.18%
Business Personnel 455,225,120.24 13.09% 616,090,268.18 13.15% 9,171 13.19% 49,637.46 62.08%
First-line Managers,
Semi-professional 408,350,223.97 11.74% 551,185,044.98 11.76% 7,921 11.40% 51,552.86 62.37%
Self-employed 352,878,504.62 10.14% 470,929,931.98 10.05% 6,623 9.53% 53,280.76 64.00%
Enterprise Person-in-
charge 181,261,663.42 5.21% 242,705,491.20 5.18% 3,213 4.62% 56,415.08 64.16%
Enterprise Executive 99,825,823.52 2.87% 134,622,459.78 2.87% 1,775 2.55% 56,239.90 63.63%
Unskilled Laborer 64,497,995.95 1.85% 86,140,939.10 1.84% 1,317 1.89% 48,973.42 63.79%
Literary and Art
Worker/Speciality 61,476,432.34 1.77% 84,854,805.90 1.81% 1,302 1.87% 47,216.92 62.38%
Agricultural, forestry,
animal husbandry,
fishery personnel
57,832,974.00 1.66% 76,683,862.93 1.64% 1,230 1.77% 47,018.68 64.37%
Salesperson 48,564,204.86 1.40% 66,048,530.45 1.41% 1,038 1.49% 46,786.32 62.30%
Administrative 45,312,048.08 1.30% 61,459,920.50 1.31% 937 1.35% 48,358.64 60.25%
69
Occupation
Outstanding
Principal Balnce
(RMB Yuan)
Percentage of
Outstanding
Principal
Balance
Contract Amount
(RMB Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
Person of
Government
Departments
Pedlar 35,193,592.01 1.01% 47,230,803.80 1.01% 704 1.01% 49,990.90 63.40%
Police, Fireman 16,420,478.01 0.47% 22,449,739.00 0.48% 338 0.49% 48,581.30 60.28%
Government Officials 10,391,439.38 0.30% 14,102,433.80 0.30% 204 0.29% 50,938.43 61.60%
Military Officer 4,614,912.69 0.13% 6,496,113.80 0.14% 93 0.13% 49,622.72 64.15%
Soldiers in Active
Service 2,628,777.90 0.08% 3,551,480.00 0.08% 44 0.06% 59,744.95 66.33%
Intern 1,073,750.01 0.03% 1,540,000.00 0.03% 24 0.03% 44,739.58 54.18%
Cleaner 941,538.49 0.03% 1,217,000.00 0.03% 19 0.03% 49,554.66 63.85%
Others 103,571.13 0.00% 188,800.00 0.00% 2 0.00% 51,785.57 71.67%
Total 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
D. Credit Scores Distribution of Borrowers
Credit Score
Outstanding
Principal Balnce
(RMB Yuan)
Percentage
of
Outstanding
Principal
Balance
Contract Amount
(RMB Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
A 597,643,734.12 17.18% 807,100,476.84 17.22% 12,449 17.91% 48,007.37 55.59%
70
Credit Score
Outstanding
Principal Balnce
(RMB Yuan)
Percentage
of
Outstanding
Principal
Balance
Contract Amount
(RMB Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
B 968,092,173.53 27.83% 1,317,755,951.50 28.12% 20,272 29.16% 47,755.14 59.64%
C 1,793,457,055.78 51.56% 2,394,413,418.39 51.09% 34,394 49.48% 52,144.47 66.62%
D 119,425,750.55 3.43% 167,404,333.30 3.57% 2,397 3.45% 49,823.01 63.50%
Total 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
E. Annual Income of Borrowers
Annual Income
Range
Outstanding
Principal Balnce
(RMB Yuan)
Percentage
of
Outstandin
g Principal
Balance
Contract Amount
(RMB Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
Below 50,000
(inclusive) 160,514,929.63 4.61% 223,373,186.32 4.77% 4,211 6.06% 38,118.01 58.13%
50,000-100,000
(inclusive) 2,040,929,693.17 58.67% 2,757,443,560.64 58.84% 42,321 60.88% 48,224.99 62.28%
100,000-150,000
(inclusive) 810,834,874.32 23.31% 1,084,030,696.07 23.13% 15,078 21.69% 53,776.02 63.51%
150,000-200,000
(inclusive) 183,742,826.84 5.28% 245,560,629.77 5.24% 3,207 4.61% 57,294.30 64.36%
200,000-250,000
(inclusive) 175,311,853.51 5.04% 232,730,503.00 4.97% 2,960 4.26% 59,226.98 64.35%
71
Annual Income
Range
Outstanding
Principal Balnce
(RMB Yuan)
Percentage
of
Outstandin
g Principal
Balance
Contract Amount
(RMB Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
250,000-300,000
(inclusive) 15,415,580.11 0.44% 20,624,717.40 0.44% 247 0.36% 62,411.26 65.55%
300,000-350,000
(inclusive) 1,904,429.69 0.05% 2,490,000.00 0.05% 33 0.05% 57,709.99 62.40%
350,000-400,000
(inclusive) 46,462,265.62 1.34% 61,822,724.83 1.32% 751 1.08% 61,867.20 65.55%
400,000-450,000
(inclusive) 2,646,670.07 0.08% 3,538,962.00 0.08% 42 0.06% 63,015.95 63.78%
450,000-500,000
(inclusive) 7,945,808.32 0.23% 10,654,060.00 0.23% 125 0.18% 63,566.47 62.62%
500,000-550,000
(inclusive) 977,126.53 0.03% 1,281,220.00 0.03% 12 0.02% 81,427.21 70.55%
550,000-600,000
(inclusive) 15,956,980.69 0.46% 21,580,720.00 0.46% 256 0.37% 62,331.96 64.93%
Above 600,000 15,975,675.48 0.46% 21,543,200.00 0.46% 269 0.39% 59,389.13 64.88%
Total 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
72
3. Statistics of the Mortgage Vehicle
A. Initial LTV of the Mortgage Loans
Initial LTV
Outstanding
Principal Balnce
(RMB Yuan)
Percentage
of
Outstanding
Principal
Balance
Contract Amount
(RMB Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
10-20%
(exclusive) 167,361.22 0.00% 220,000.00 0.00% 5 0.01% 33,472.24 18.88%
20-30%
(exclusive) 5,337,309.71 0.15% 7,449,900.00 0.16% 177 0.25% 30,154.29 27.44%
30-40%
(exclusive) 83,372,283.69 2.40% 114,620,764.81 2.45% 2,330 3.35% 35,782.10 36.83%
40-50%
(exclusive) 423,076,901.03 12.16% 584,894,445.45 12.48% 10,495 15.10% 40,312.23 45.89%
50-60%
(exclusive) 975,795,343.98 28.05% 1,342,282,498.50 28.64% 21,397 30.78% 45,604.31 55.20%
60-70%
(exclusive) 895,433,596.41 25.74% 1,200,001,847.07 25.60% 16,865 24.26% 53,094.19 65.10%
Above 70%
(inclusive) 1,095,435,917.94 31.49% 1,437,204,724.20 30.67% 18,243 26.24% 60,046.92 75.98%
Total 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
73
B. Brand of Mortgage Vehicle
Brand
Outstanding
Principal Balnce
(RMB Yuan)
Percentage
of
Outstanding
Principal
Balance
Contract Amount
(RMB Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
Haval 2,640,335,728.19 75.90% 3,537,966,278.84 75.49% 55,127 79.31% 47,895.51 63.64%
WEY 819,983,833.85 23.57% 1,124,310,635.45 23.99% 13,888 19.98% 59,042.61 59.45%
Ora 18,276,319.52 0.53% 24,357,265.74 0.52% 496 0.71% 36,847.42 67.86%
GWM 22,832.42 0.00% 40,000.00 0.00% 1 0.00% 22,832.42 80.00%
Total 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
C. New/Second-hand Vehicle
New/Second-hand
Vehicle
Outstanding
Principal Balnce
(RMB Yuan)
Percentage of
Outstanding
Principal
Balance
Contract
Amount (RMB
Yuan)
Percentage of
Contract
Amount
Number of
Mortgage Loans
Percentage of
Mortgage Loan
Numbers
Average Balance
(RMB Yuan)
Weighted
Average LTV
NewVehicle 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
Total 3,478,618,713.98 100.00% 4,686,674,180.03 100.00% 69,512 100.00% 50,043.43 62.68%
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Chapter 5 Basic Information of the Notes
1. Expenses
The following expenses listed below shall be borne by the Trust Property unless
otherwise stipulated by the Transaction Documents and paid according to the order of
priority set forth under Section 9 of the Trust Agreement:
(1) The taxes and governmental charges (including but not limited to value-added
tax and surcharges) shall be borne by the Trust Property according to PRC Laws;
(2) During the Trust Duration, the Service Fees of the Trustee, the Servicer, the
Back-up Servicer (if any), the Fund Custodian, the Paying Agent, the Rating
Agencies (not including the the service fees of CCXI for its initial rating and
tracking rating) and the Auditor;
(3) The Enforcement Expenses advanced by the Servicer;
(4) The Reimbursable Expenses;
(5) The expenses incurred for liquidating the Trust Property;
(6) Other expenses that shall be paid from the Trust Property according to PRC
Laws or the Transaction Documents.
Unless specially stipulated in the Fee Letters, the fees borne by the Trust Property
shall include the taxes, and the party who receives such fees shall issue a plain value-
added tax invoice, and in the invoice’s remark column this trust project name shall be
noted. If otherwise provided by PRC Laws in the future, the Trustee has the right to
require the party who receives such fees to issue special invoice (adjusted according to
tax law) for value-added tax according to PRC Laws.
2. Schedule
Cutoff Date means 24:00 of March 31, 2020.
Bookbuilding Date means such date specified in the offering announcement.
Subscription Date
means the second (2nd) Business Day after the Bookbuilding
Date; the specific date will be disclosed in the offering
announcements.
Trust Property
Delivery Date
means the day on which the Settlor delivers the Trust Property
to the Trustee under the Trust Agreement, specifically, the first
(1st) Business Day after the Subscription Date.
Trust Effective
Date
means the effective date of the trust when all the conditions are
met (or waived by the rightful party) under Section 3.5 of the
Trust Agreement. In this Trust, the Trust Effective Date is the
Trust Property Delivery Date.
Calculation Date means the last day of each calendar month, the first Calculation
date shall be July 31, 2020 and the last Calculation Date shall
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be the last day of the calendar month before the last Payment
Date.
Collection Transfer
Date
means the date on which the Servicer transfers the Collections
to the Trust Account, which shall be determined according to
the following rules:
(a) If the Servicer maintains both a long-term corporate
rating of A or higher by CCXI, and a long-term credit
corporate rating of A- or higher by CBR, the
Collection Transfer Date shall be determined
according to the following rules: as for the
Collections received during the period from a
Calculation Date (exclusive) to the fifth (15th) Day
(inclusive) of the calendar month immediately after
such Calculation Date, the corresponding Collection
Transfer Date is the sixth (6th) Business Day after
such fifth (15th) Day of such calendar month; as for
the Collections received during the period from the
fifth (15th) Day (exclusive) of each calendar month
to the Calculation Date (inclusive) immediately after
such fifth (15th) Day of such calendar month, the
corresponding Collection Transfer Date is the sixth
(6th) Business Day after such Calculation Date;
among which, the first Collection Transfer Date is the
sixth (6th) Business Day after the first Calculation
Date.
(b) If the Servicer has either a long-term corporate rating
lower than A by CCXI, or a long-term corporate
rating lower than A- by CBR; or item (a) of Right
Perfection Event occurs, and the Settlor or the
Trustee shall inform the Borrower, the Guarantor (if
any), and the Insurer (if any) to pay the payables to
the Trust Account, but the Borrower, the Guarantor
(if any) or the Insurer (if any) continues to pay the
Collections to the Servicer, the Collection Transfer
Date is the third (3rd) Business Day after the Servicer
receives each Collection.Any business day within
three (3) Business Days after the day the Servicer
receives each Collection, if the Settlor or the Trustee
informs the Borrower, the Mortgagor, the Guarantor
(if any), the Insurer (if any) to pay the payables to the
Trust Account, but the Borrower, the Mortgagor, the
Guarantor (if any), the Insurer (if any) continues to
pay the Collections to the Servicer.
(c) The Collection Transfer Date shall be any business
day within three (3) Business Days after the Trust
Termination Date, if the Trust terminates; and any
Business Day within three (3) Business Days of the
Servicer’s receipt of any Collection (if any), if the
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Servicer still receives Collections after the Trust
Termination Date.
If a Collection Transfer Date is subject to
modification as a result of changes in the credit rating
of the Servicer by either of the Rating Agencies, such
modification shall become effective according to the
rules above. Such a modification in Collection
Transfer Date is not subject to recovery or reversion
even if the Servicer’s credit ratings recover.
Servicer Reporting
Date
means the sixth (6th) Business Day after the last day of each
Collection Period.
Fund Custodian
Reporting Date
means the seventh (7th) Business Day after the last day of each
Collection Period.
Fund Custodian
Report
means the report, including the annual Fund Custodian Report
and the monthly Fund Custodian Report, prepared by the Fund
Custodian in compliance with the format in Schedule 4 and
Schedule 5 of the Fund Custody Agreement.
Trust Distribution
Date
means the tenth (10th) Business Day after the last day of each
Collection Period, but if such date is later than the Trustee
Reporting Date, then the Trustee Distribution Date shall be no
later than the Trustee Reporting Date.
Trustee Reporting
Date
means the fifth (5th) Business Day prior to the Payment Date.
Trustee Report means the report, including the annual Trustee Report and the
monthly Trustee Report, prepared by the Trustee under
Schedule 9 of the Trust Agreement.
Interest Calculation
Date
means the twenty sixth (26th) day of each calendar month (the
first Interest Calculation Date shall be August 26, 2020), but
the last Interest Calculation Date of each class of Note shall be
the day when the principal of such class is paid off.
Payment Date means the twenty-sixth (26th) day of each month, starting with
August 26, 2020; but if such day is not a Business Day, the
Payment Date will be the immediately following Business
Day.
Interest Settlement
Date
means the day on which the Fund Custodian settles the interest
by quarter, which shall be March 21st, June 21st, September
21st, and December 21st of each year.
Expected Maturity
Date
means, for the Class A1 Notes, May 26, 2021; for the Class A2
Notes, October 26, 2021; and for the Subordinated Notes,
April 26, 2023. Expected Maturity Date is not the actual
maturity date of the Notes; the Notes could be paid off before
or after the Expected Maturity Date.
Repurchase Cutoff
Date
means, for the repurchase of Ineligible Asset provided in the
Trust Agreement, the last day of the Collection Period during
which the Trustee requests the repurchase of the Ineligible
Asset; for the Clean-up Call provided in the Trust Agreement,
the last day of the Collection Period prior to the Collection
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Period in which the Settlor notifies the Trustee of the Clean-up
Call.
Final Maturity Date means April 26, 2026.
Trust Termination
Date
means the date on which any of the following events occurs:
(a) The purpose of the Trust cannot be realized;
(b) The Trust is revoked or is determined to be invalid or
is ordered to terminate by the court or arbitration
institutions according to the Laws;
(c) CBIRC or the relevant regulatory authorities orders
the termination of the Trust under the Laws;
(d) The Meeting of Noteholders decides to terminate the
Trust before the Final Maturity Date;
(e) The Trust Property is fully liquidated (including by
Clean-Up Call);
(f) The Final Maturity Date arrives.
Business Day means any day on which commercial banks in the PRC are
open for business (except for the statutory public holidays in
the PRC).
Date/Day means calendar day, except for Business Day as defined
otherwise.
Trust Duration means the period of time between the Trust Effective Date
(inclusive) to Trust Termination Date (exclusive).
Collection Period means the period from a Calculation Date (exclusive) to the
next Calculation Date (inclusive), provided that, the first
Collection Period means the period from the Cutoff Date
(exclusive) to the first Calculation Date (inclusive).
Collection Period means the period from a Calculation Date (exclusive) to the
next Calculation Date (inclusive), provided that, the first
Collection Period means the period from the Cutoff Date
(inclusive) to the first Calculation Date (inclusive).
3. Key Terms of Notes
The Notes to be issued are classified into three tranches, Class A1 Notes, Class A2
Notes and Subordinated Notes, representing the Senior Trust Beneficial Right and
Subordinated Trust Beneficial Right accordingly. Summary of each tranche is as
follows:
Principal Amount
(RMB Yuan)
Percentage of
Initial Pool
Balance
Percentage of
Total Issuing
Amount
Credit Rating
(CBR/CCXI)
Coupon
Type
Principal
Repayment
Payment
Frequency
Expected
Maturity
Date
Class A1 Notes 1,400,000,000.00 40.25% 41.5430% AAAsf/AAAsf Fixed Scheduled
Amortization Monthly 2021/5/26
Class A2 Notes 1,580,000,000.00 45.42% 46.8843% AAAsf/AAAsf Fixed Pass-through Monthly 2021/10/26
Subordinated Notes 390,000,000.00 11.21% 11.5727% - - Pass-through Monthly 2023/4/26
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Total Issuing
Amount 3,370,000,000.00 96.88% 100.00% - - - -
-
Over-
collateralization 108,618,713.98 3.12% - - - - - -
Total 3,478,618,713.98 100.00% - - - - - -
On the issuance date of the Notes, the total size (total par value) of all Notes is
RMB 3,370,000,000.00 Yuan. The Notes are to be publicly issued by bookbuilding and
centralized placement. China Merchants Securities Co., Ltd will lead the bookbuilding
and designate an exclusive bookbuilding room to coordinate and conduct bookbuilding,
the address of which is Bookbuilding Room, 17F, China Merchants Bank Tower, No.3
Building, No.1 Yard, Yuetan South Street, Xicheng District, Beijing.
Senior Notes that are in compliance with the trading requirements are transferable
fixed-income products which represent corresponding interests of relevant holders in
the Trust (including the right to receive Trust Benefits under the Trust Agreement).
A. Senior Notes
(A) Class A1 Notes
Summay of characteristics of Class A1 Notes is as follows:
Rating AAAsf /AAAsf (CBR/CCXI)
Amount RMB 1,400,000,000.00 Yuan
Par Value of Each One RMB 100 Yuan
Offering Price Offered at par value
Coupon Rate Fixed rate determined according to the result of the
bookbuilding
Value Date July 14, 2020
Interest Period
means the period from an Interest Calculation Date
(inclusive) to the next Interest Calculation Date
(exclusive), among which the first Interest Period is the
period from the Trust Effective Date (inclusive) to the
first Interest Calculation Date (exclusive).
Interests Accrual
The interest payable on the Class A1 Notes on each
Payment Date=the Outstanding Principal Balance (for
the first Payment Date, means the par value of the Class
A1 Notes) of the Class A1 Notes on such Payment Date
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before the payment of principal * coupon rate * the
actual number of days for such an Interest Period/365
(same for leap year); rounded up to cents, omitting
decimal fractions smaller than 0.005 and counting all
others; simple interest.
Payment of Interest Monthly
Payment of Principal Scheduled amortization.
Expected Maturity Date May 26, 2021
Expected Weighted
Average Life 0.49 year
Final Maturity Date April 26, 2026
The basic characteristics of Class A1 Notes are as follows:
1. Principal Amount and Percentage: As of the issuance date of the Notes, the total
principal amount (par value) of the Class A1 Notes issued is RMB
1,400,000,000.00 Yuan, taking 41.5430% of the total issuance volume of the Notes
(par value) and 40.25% of the principal balance of the Asset Pool.
2. Par Value: The par value of each Class A1 Note will be RMB 100 Yuan.
3. Offering Price: Offered at par value.
4. Duration of the Notes: From the Trust Effective Date (inclusive) to the
corresponding Final Maturity Date (exclusive). Final Maturity Date is not
necessarily the actual maturity date of Class A1 Notes, the principal of Class A1
Notes could be fully paid prior to the Final Maturity Date.
5. Expected Maturity Date: May 26, 2021.
6. Coupon Rate: As for the Class A1 Notes, means the coupon rate determined
according to the result of the Bookbuilding and disclosed in the Announcement on
Issuance Results.
7. Interest Period：means the period from a Payment Date (inclusive) to the next
Payment Date (exclusive), among which the first Interest Period is the period from
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the Trust Effective Date (inclusive) to the first Interest Calculation Date (exclusive).
8. Interest Accrual: The interest payable on the Class A1 Notes on each Payment Date
= the Outstanding Principal Balance (for the first Payment Date, means the par
value of the Class A1 Notes) of the Class A1 Notes on such Payment Date before
the payment of principal * coupon rate * the actual number of days for such an
Interest Period/365 (same for leap year); rounded up to cents, omitting decimal
fractions smaller than 0.005 and counting all others; simple interest.
9. Payment of Interest and Principal: On each Payment Date, the Trustee shall pay
interest to the Class A1 Noteholders according to the payment priorities set forth
in Section 9 of the Trust Agreement. On each Payment Date, the Trustee shall pay
principal to the Class A1 Noteholders according to the payment priorities set forth
in Section 9 of the Trust Agreement.
10. Notes Type: Registered with and in the custody of CCDC in the real-name
bookkeeping form.
11. Taxes: If according to PRC Laws, the Trustee shall withhold or deduct any tax and
fees or other expenses charged by the government from the payables including the
principal and interest payable to the Class A2 Noteholders or from the Trust
Property, then the Trustee is entitled to withhold or deduct such tax, fees and
expenses according to PRC Laws.
12. Currency: RMB.
13. Credit Ratings: On the issuance date of the Notes, CCXI gives the Class A1 Notes
a rating of AAAsf, and CBR gives the Class A1 Notes a rating of AAAsf.
14. Amortizaiton Schedule: During the Trust Duration, in the case where no
Accelerated Payment Event or Event of Default has occurred, and the principal of
Class A2 Notes has not been paid off, the principal of Class A1 Notes shall be
amortized and paid in according to the following amortization schedule:
Payment Date Target Balance (RMB
81
(if such day is not a Business Day, the Payment Date will be the
immediately following Business Day)
Yuan)
August 26, 2020 1,260,000,000
September 26, 2020 1,120,000,000
October 26, 2020 980,000,000
November 26, 2020 840,000,000
December 26, 2020 700,000,000
January 26, 2021 560,000,000
February 26, 2021 420,000,000
March 26, 2021 280,000,000
April 26, 2021 140,000,000
May 26, 2021 0
(B) Class A2 Notes
Summay of characteristics of Class A2 Notes is as follows:
Rating AAAsf /AAAsf (CBR/CCXI)
Amount RMB 1,580,000,000.00 Yuan
Par Value of Each One RMB 100 Yuan
Offering Price Offered at par value
Coupon Rate Fixed rate determined according to the result of the
bookbuilding
Value Date July 14, 2020
Interest Period
means the period from an Interest Calculation Date
(inclusive) to the next Interest Calculation Date
(exclusive), among which the first Interest Period is the
period from the Trust Effective Date (inclusive) to the
first Interest Calculation Date (exclusive).
Interests Accrual
The interest payable on the Class A2 Notes on each
Payment Date=the Outstanding Principal Balance (for
the first Payment Date, means the par value of the Class
A2 Notes) of the Class A2 Notes on such Payment Date
before the payment of principal * coupon rate * the
actual number of days for such an Interest Period/365
(same for leap year); rounded up to cents, omitting
decimal fractions smaller than 0.005 and counting all
others; simple interest.
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Payment of Interest Monthly
Payment of Principal Pass through
Expected Maturity Date October 26, 2021
Expected Weighted
Average Life 0.63 year
Final Maturity Date April 26, 2026
The basic characteristics of Class A2 Notes are as follows:
1. Principal Amount and Percentage: As of the issuance date of the Notes, the total
principal amount (par value) of the Class A2 Notes issued is RMB
1,580,000,000.00 Yuan, taking 46.8843% of the total issuance volume of the Notes
(par value) and 45.42% of the principal balance of the Asset Pool.
2. Par Value: The par value of each Class A2 Note will be RMB 100 Yuan.
3. Offering Price: Offered at par value.
4. Duration of the Notes: From the Trust Effective Date (inclusive) to the
corresponding Final Maturity Date (exclusive). Final Maturity Date is not
necessarily the actual maturity date of Class A2 Notes, the principal of Class A2
Notes could be fully paid prior to the Final Maturity Date.
5. Expected Maturity Date: October 26, 2021.
6. Coupon Rate: As for the Class A2 Notes, means the coupon rate determined
according to the result of the Bookbuilding and disclosed in the Announcement on
Issuance Results.
7. Interest Period：means the period from a Payment Date (inclusive) to the next
Payment Date (exclusive), among which the first Interest Period is the period from
the Trust Effective Date (inclusive) to the first Interest Calculation Date (exclusive).
8. Interest Accrual: The interest payable on the Class A1 Notes on each Payment Date
= the Outstanding Principal Balance (for the first Payment Date, means the par
83
value of the Class A2 Notes) of the Class A2 Notes on such Payment Date before
the payment of principal * coupon rate * the actual number of days for such an
Interest Period/365 (same for leap year); rounded up to cents, omitting decimal
fractions smaller than 0.005 and counting all others; simple interest.
9. Payment of Interest and Principal: On each Payment Date, the Trustee shall pay
interest to the Class A2 Noteholders according to the payment priorities set forth
in Section 9 of the Trust Agreement. On each Payment Date, the Trustee shall pay
principal to the Class A2 Noteholders according to the payment priorities set forth
in Section 9 of the Trust Agreement.
10. Notes Type: Registered with and in the custody of CCDC in the real-name
bookkeeping form.
11. Taxes: If according to PRC Laws, the Trustee shall withhold or deduct any tax and
fees or other expenses charged by the government from the payables including the
principal and interest payable to the Class A2 Noteholders or from the Trust
Property, then the Trustee is entitled to withhold or deduct such tax, fees and
expenses according to PRC Laws.
12. Currency: RMB.
13. Credit Ratings: On the issuance date of the Notes, CCXI gives the Class A2 Notes
a rating of AAAsf, and CBR gives the Class A2 Notes a rating of AAAsf.
B. Subordinated Notes
Summay of characteristics of Subordinated Notes is as follows:
Rating Not Rated
Amount RMB 390,000,000.00 Yuan
Offering Price Offered at par value
Coupon Rate No coupon rate
Interests Accrual In the case where no Event of Default or Accelerated
Payment Event has occurred, pay the periodic returns;
84
after the principal of Notes has been paid off, pay the
residual returns.
Payment of Principal
The principal shall be paid according to the payment
priorities set forth in the Trust Agreement (for details
refer to Chapter 2 Section 5 of this Offering Circular
Distribution of Collection).
Expected Maturity Date April 26, 2023
Expected Weighted
Average Life 1.60 years
Final Maturity Date April 26, 2026
The basic characteristics of Clasws A2 Notes are as follows:
1. Principal Amount and Percentage: As of the issuance date of the Notes, the total
principal amount (par value) of the Subordinated Notes issued is RMB
390,000,000.00 Yuan, taking 11.5727% of the total issuance volume of the Notes
(par value) and 11.21% of the principal balance of the Asset Pool. All of the
Subordinated Notes will be held by the Settlor.
2. Par Value: The par value of each Subordinated Note will be RMB 100 Yuan.
3. Offering Price: Offered at par value.
4. Duration of the Notes: From the Trust Effective Date (inclusive) to the
corresponding Final Maturity Date (exclusive). Final Maturity Date is not
necessarily the actual maturity date of Subordinated Notes, the principal of
Subordinated Notes could be fully paid prior to the Final Maturity Date.
5. Expected Maturity Date: April 26, 2023.
6. Coupon Rate: No coupon rate.
7. Payment of Interest and Principal: On each Payment Date, the Trustee shall pay
interest to the Subordinated Noteholders according to the payment priorities set
forth in Section 9 of the Trust Agreement. On each Payment Date, the Trustee shall
85
pay principal to the Subordinated Noteholders according to the payment priorities
set forth in Section 9 of the Trust Agreement.
8. Notes Type: Registered with and in the custody of CCDC in the real-name
bookkeeping form.
9. Taxes: If according to PRC Laws, the Trustee shall withhold or deduct any tax and
fees or other expenses charged by the government from the payables including the
principal and interest payable to the Subordinated Noteholders or from the Trust
Property, then the Trustee is entitled to withhold or deduct such tax, fees and
expenses according to PRC Laws.
10. Currency: RMB.
11. Credit Ratings:Subordinated Notes are not rated。
4. Risk Retention
According to the Notice on the Further Expansion of Credit Asset Securitization Pilot
Program (Yinfa [2012] No.127) and China Banking Regulatory Commission and People's
Bank of China Circular [2013] No. 21, Originators in credit asset securitization are
required to hold a proportion of securitization products that they originate, namely, at
least 5% of the total issuance size of the securitization products they originate, and at
least 5% of the issuance size of the lowest-grade notes; the holding period shall be no
shorter than the duration of the corresponding notes. In compliance with the above
regulations, TGBAFC as the Originator will hold all the Subordinated Notes, which
accounts for 11.5727% of the total issuance size and the holding period shall be no
shorter than the duration of the notes.
Meanwhile, TGBAFC as the Servicer of this securitization transaction, shall fulfill
the relevant provisions under the Service Agreement.
5. Method of Offering
The Notes are planned to be issued in the way of bookbuilding.
Please refer to Chang Ying 2020-2 Retail Auto Mortgage Loan Asset Backed
Securities Offering Announcement for detailed schedule of this offering.
The Originator entrusts China Merchants Securities Co., Ltd as Bookrunner in
charge of the bookbuilding. The bookbuilding will take place in a dedicated
bookbuilding room located at Bookbuilding Room, 17F, China Merchants Bank Tower,
86
No.3 Building, No.1 Yard, Yuetan South Street, Xicheng District, Beijing.
The dedicated bookbuilding room is kept separate from other business zones, and
its physical space is adequate for carrying out the bookbuilding. The Bookrunner has
the issuance and investment firewall mechanism, and has worked out special
bookbuilding procedures and risk control measures cooperatively with the Issuer for
this Notes, which can cope with unexpected situations occurred during the
bookbuilding, as well as ensuring that the bookbuilding procedure is open, fair and just.
6. Sensitivity Analysis
A. Tranche Design
Considering the demand of investors and the cash flows of the Asset Pool, the
Notes to be issued are divided into three tranches: Class A1 Notes, Class A2 Notes, and
Subordinated Notes, taking a percentage of 41.5430%, 46.8843% and 11.5727%
respectively. The ratings are AAAsf/AAAsf (CBR/CCXI) for both Class A1 Notes and
Class A2 Notes; Subordinated Notes are not rated.
B. Coupon Rate of the Notes
Within the duration of the Notes, interests on Class A1 Notes and Class A2 Notes
will be paid monthly at fixed rate, while no coupon rate is given to Subordinated Notes.
Meanwhile, cash flows of the Underlying Assets come from the principal and interests
of Mortgage Loans, so there will be no problem of interest rate mismatch as for the
Notes, and the increase and decrease of benchmark interest rate will not affect the Notes
as well.
C. Weighted Average Life (WAL)
The weighted average life of the Class A1 Notes and Class A2 Notes means the
average time needed for full repayment of principal of the Class A1 Notes and Class
A2 Notes. The sources of principal and interest payment of the Class A1 Notes and
Class A2 Notes are the principal and interest collections from the Mortgage Loans in
the Asset Pool, as well as recoveries from disposal of the Mortgage Vehicles, and other
interest penalties and default penalties. Thus, the cash flow conditions of the Mortgage
Loans in the Asset Pool will have direct influence on weighted average life (WAL) of
the Class A1 Notes and Class A2 Notes.
The weighted average life (WAL) of Class A1 Notes and Class A2 Notes are 0.49
year and 0.63 year respectively.
87
D. Analysis of Interest Rate Sensitivity
Class A1 Notes and Class A2 Notes adopt fixed coupon rate, so the adjustment of
benchmark interest rate will not affect the coupon rate of the Class A1 Notes and Class
A2 Notes.
E. Calculation of the Influence of Prepayment
Sensitivity analysis on prepayment: considering that the coupon rate is fixed,
prepayment of the Loans will cause no difference on the yield of the Senior Notes. This
part only analyzes changes of the weighted average life (WAL). Quantitative analysis
indicates that if prepayment rate increases, the weighted average life of each tranche
will shrink, but to different extent. Details are as follows.
Sensitivity to Prepayment for Weighted Average Life (WAL) of Senior Notes
Prepayment
Rate Class A1 Notes (yr) Class A2 Notes (yr)
0.00% 0.49 0.63
2.00% 0.49 0.60
4.00% 0.49 0.57
6.00% 0.49 0.55
8.00% 0.49 0.52
10.00% 0.49 0.49
12.00% 0.49 0.47
14.00% 0.49 0.44
16.00% 0.49 0.42
18.00% 0.49 0.40
20.00% 0.49 0.38
Note: The prepayment rate is annual rates, i.e. annual prepayment rate = 1 - ( 1 - monthly prepayment
rate) ^ 12; monthly prepayment rate = amount of monthly prepayment / (Outstanding Principal
Balance at the start of the month - monthly Collections according to contracts)
88
Chapter 6 Opinions of Intermediaries
1. Summary of Legal Due Diligence Opinions and Legal Opinions
Zhong Lun Law Firm (“Zhong Lun”), is a law firm qualified to practice the law in
PRC. Zhong Lun acts as the legal counsel for CHANG YING 2020-2 Retail Auto
Mortgage Loan Securitization Trust (the “Project”) conducted by Tianjin Great Wall
Binyin Automotive Finance Company, Limited (the “TGBAFC” or “Originator”) and
China Foreign Economy and Trade Trust Co., Ltd. (the “FOTIC” or “Trustee”). Zhong
Lun conducted legal due diligence on the Mortgage Loans and the Security Right and
Interest.
A. Legal Due Diligence Opinions
Zhong Lun issues the Legal Due Diligence Report (the “Legal Due Diligence
Report”) following the principle of diligence and good faith, in the light of practice
standard, ethical codes and the spirit of diligence generally accepted by the legal
profession, and in accordance with the Trust Law of the People’s Republic of China, the
Contract Law of the People’s Republic of China, the Guaranty Law of the People's
Republic of China, the Property Law of the People's Republic of China, the
Administrative Measures of Pilot Credit Asset Securitization, the Supervision and
Administrative Measures of Pilot Credit Asset Securitization of Financial Institutions,
and the Announcement of the People’s Bank of China [2007] No.16, and other relevant
laws, administrative regulations, departmental regulations and regulatory documents
that is currently effective.
Introduction to the Legal Due Diligence Process
Since the Asset Pool of this Project consists of 69,512 Mortgage Loans, which is
a huge amount of loans. All the loans adopt the standard templates of auto mortgage
loan agreement. As for the legal due diligence, based on the huge amount of the auto
Mortgage Loans in the Asset Pool, from a perspective of practical feasibility, by
confirming with the Project team, Zhong Lun conducts the legal due diligence by
reviewing Mortgage Loan samples randomly selected.
As for the legal due diligence, after engaged by TGBAFC, Zhong Lun conducted
due diligence to the condition of the Asset Pool from legal perspective. Our due
diligence includes designing the Legal Due Diligence Checklists according to the
requirements of this Project, completing the legal due diligence by reviewing the
Mortgage Loan Agreement templates and the Agreements of the Mortgage Loan
samples to verify whether they satisfy the Eligibility Criteria of the Asset Pool as for
the legal matters, according to the documents in relation to the Asset Pool provided by
TGBAFC and relying on our professional judgment. Detailed process of the legal due
diligence is as follows:
(1) Collecting Due Diligence Documents
89
From the legal due diligence perspective and based on the needs of the Project,
Zhong Lun designed “Legal Due Diligence Questionnaire and Checklist (Investigation
on Agreement Templates)” and “Legal Due Diligence Questionnaire and Checklist
(Investigation on Mortgage Loan Samples)”. The “Legal Due Diligence Questionnaire
and Checklist (Investigation on Agreement Templates)” is designed to investigate the
TGBAFC’s qualification and the Mortgage Loan Agreement templates, for such
purpose, Zhong Lun required TGBAFC to provide relevant corporate documents and
auto Mortgage Loan Agreement templates applicable to the Asset Pool; the “Legal Due
Diligence Checklist (Investigation on Mortgage Loan Samples) is designed to
investigate the detailed condition of the Mortgage Loan samples, for such purpose,
Zhong Lun required TGBAFC, as for each Mortgage Loan sample related to our
Mortgage Loan Agreement sample, to provide all the Mortgage Loan Agreements,
documents related to the Mortgage Vehicles and other documents related to the review
of the law-related Eligibility Criteria.
(2) Reviewing Mortgage Loan Agreement Templates
Zhong Lun has reviewed the mortgage loan agreement templates adopted by the
pooled Mortgage Loans and provided by TGBAFC. As for such agreements templates,
with consideration of whether the terms of such agreements templates meet the law-
related Eligibility Criteria of the Asset Pool, Zhong Lun has reviewed such agreements
templates from the perspectives of the Criteria for the Borrower, the Criteria for the
Mortgage Loan and the Criteria for the Mortgage Vehicle etc.
(3) Sampling of the Mortgage Loan Agreements
Based on the needs of legal due diligence, Zhong Lun selected 100 asset samples
according to following methods: (1) select 10 samples which have the largest
Outstanding Principal Balance; (2) select at least 1 sample from each of the 10 cities
occupying the largest proportion in total amount of the Outstanding Principal Balance;
(3) select at least 1 sample from each brand of the Mortgage Vehicles; (4) select
randomly from the rest of the Mortgage Loans until the amount of the Mortgage Loan
samples totals 100.
(4) Reviewing the Agreements of Mortgage Loan Samples
Zhong Lun has reviewed the Mortgage Loan Agreements of Mortgage Loan
samples in comparison with the applicable agreement templates provided by TGBAFC
and, based on the law-related Eligibility Criteria agreed in the Definition Schedule and
the Trust Agreement for Chang Ying 2020-2 Retail Auto Mortgage Loan Securitization
Trust (the “Trust Agreement”), reviewing on whether the Mortgage Loan samples meet
the relevant law-related Eligibility Criteria.
(5) Supplementary Documents, Discussion and Confirmation
In addition to the work described above, based on the actual situation of the legal
due diligence, Zhong Lun required TGBAFC to provide other relevant supplementary
documents, and updated timely the Legal Due Diligence Form as the working papers,
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after receiving such supplementary documents. Zhong Lun also discussed with relevant
personnel of TGBAFC on certain questions and required TGBAFC to make statements,
confirmations and commitments on certain matters.
Conclusion of Legal Due Diligence
Based on the above, after reviewing the condition of the Mortgage Loan samples
listed in the Schedule of this Legal Due Diligence Report by the Cutoff Date, according
to the currently effective PRC Laws and following the practice standard, ethical codes
and the spirit of diligence generally accepted by the legal profession, Zhong Lun is of
the opinions that:
The Mortgage Loan samples Zhong Lun reviewed are in consistency with the
Agreement Templates provided by TGBAFC in all material aspects. The terms of the
Agreement Templates related to the Mortgage Loan samples Zhong Lun reviewed
comply with the laws and regulations. As of the Cutoff Date (or other date otherwise
stipulated hereinafter), the Mortgage Loan samples and their Security Right and Interest
meet the following law-related Eligibility Criteria provided in the Definition Schedule
and the Trust Agreement:
(1) Criteria for the Borrower：
(a) The Borrower is a Chinese citizen or a permanent resident, and a natural person
who is at least eighteen (18) years of age on the loan disbursement date;
(b) At the time the Mortgage Loan is disbursed, the Borrower is not an employee
who has a labor contract with the Originator;
(2) Criteria for the Mortgage Loan：
(a) The Mortgage Loan has been disbursed in full, and the Borrower has
authorized the Originator a right of recoupment, or such right of recoupment
has been stipulated in the Mortgage Loan Agreement;
(b) The applicable law for the Mortgage Loan Agreement is PRC law;
(c) The Mortgage Loan Agreement and the Mortgage Right are legal and valid,
and constitute legal, effective and binding obligations of the Borrower, the
creditor and mortgagee, are entitled to make valid claims against the Borrower
under the Mortgage Loan Agreement;
(d) The Mortgage Loan Agreements provide that the Borrower, the Co-Borrower
or the Mortgagor shall accomplish the registration of the Mortgage Right in
the Mortgage Vehicle at the relevant registration authority in PRC, and as of
the Cutoff Date, the Originator was granted a first priority Mortgage Right in
the Mortgage Vehicle;
(e) Unless the Borrower prepays all the payable amounts (including existing and
prospective, actual and contingent) under relevant Mortgage Loan Agreement,
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the Borrower has no right to unilaterally terminate the Mortgage Loan
Agreement;
(f) There is no provision in the Mortgage Loan Agreement prohibiting or
restricting the transfer of the Mortgage Loan and the Security Right and
Interest, and the Originator does not need the consent of the Borrower,
Mortgagor, Guarantor or any other entity to entrust or transfer in whole or in
part of the Mortgage Loan and the Security Right and Interest;
(g) As of the Cutoff Date, for such Mortgage Loan, there is no unresolved dispute
between the Originator and the Borrower regarding the payable amount,
payment due time, terms of payment or any other aspect of the Mortgage Loan;
nor is there any litigation, arbitration, bankruptcy or enforcement proceeding
ongoing involving the Mortgage Loan;
(h) As of the Cutoff Date, aside from the statutory right of offset, the relevant
Borrower is not entitled to claim for any deduction or exemption of the
payables under the Mortgage Loan Agreement;
(3) Criteria for the Mortgage Vehicle:
(a) At the completion of registration of the mortgage over the Mortgage Vehicle
with the relevant registration authority in PRC, the related Mortgage Vehicle
had been insured according to the customary business standard, such insurance
policies include but are not limited to property insurance acquired in the name
of the Borrower but under which the Originator is the primary beneficiary
(except for third-party liability insurance);
(4) Criteria for the Disbursement and Selection of the Mortgage Loan:
(a) The Mortgage Loan is disbursed under the standard credit procedure of the
Originator and other relevant policies, practices, and procedures on mortgage
loans;
(b) The Borrower or Mortgagor’s ability to assign or otherwise dispose the
obligations under the Mortgage Loan Agreement or to dispose the Mortgage
Vehicle thereunder without consent of the Originator is prohibited or restricted
by the PRC Laws or the Mortgage Loan Agreement.
Judgment on the Legality
Based on the results of our legal due diligence on the Mortgage Loan samples
listed in the Schedule of the Legal Due Diligence Report and the statements,
explanations, confirmations and commitments provided by TGBAFC, Zhong Lun made
the following judgment on the legality of the Mortgage Loan samples listed in the
Schedule:
(a) The Mortgage Loan samples listed in the Schedule of the Legal Due Diligence
Report are legally owned by TGBAFC, and can be the Trust Property of this
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Project.
(b) The granting of Mortgage Loan samples listed in the Schedule of the Legal
Due Diligence Report will not violate the mandatory provisions of PRC laws
and regulations.
B. Summary of Legal Opinions
Zhong Lun Law Firm (“Zhong Lun”), is a law firm qualified to practice law in
the PRC. Zhong Lun hereby issues their legal opinions for Chang Ying 2020-2 Retail
Auto Mortgage Loan Securitization Trust (the “Project”) originated by Tianjin Great
Wall Binyin Automotive Finance Company, Limited. (the “TGBAFC”).
By reviewing the Transaction Documents provided by TGBAFC and FOTIC and
the business license, articles of association, internal authorization documents and other
necessary files provided by TGBAFC in the principle of diligence and good faith,
according to the practice standards, moral rules and in the spirit of diligence as generally
accepted by the legal profession, and pursuant to the provisions of the Trust Law of
PRC (the “Trust law”), the Contract Law of PRC (the “Contract Law”), the Guaranty
Law of PRC, the Property Law of PRC (the “Property Law”), the Enterprise Bankruptcy
Law of PRC, the Administrative Measures on the Pilot Credit Asset Securitization, the
Measures on Supervision and Administration of the Pilot Credit Asset Securitization of
Financial Institutions, the Announcement of the People’s Bank of China [2015] No.9
and other relevant laws, administrative regulations, departmental regulations and
regulatory documents, Zhong Lun has examined and will give their opinions on the
legality, validity and enforceability of the Transaction Documents and the legality of
the creation of the Trust.
Zhong Lun’s Legal Opinions are based on the following assumptions:
(1) All documents submitted to Zhong Lun by the TGBAFC, the FOTIC, the Fund
Custodian, the Principal Underwriters and other parties involved in the Project
as originals are authentic, and all documents submitted to Zhong Lun as
photocopies or by fax or email or in other electronic forms conform to their
originals and the originals submitted to Zhong Lun later are authentic; all
signatures on the aforementioned documents are true and valid, and all the
natural persons who have signed the documents have capacity of civil right
and full capacity of civil act;
(2) The electronic versions of the Transaction Documents provided to Zhong Lun
by TGBAFC and FOTIC are substantially consistent with the final forms of
such documents to be executed by the parties of this Project;
(3) Each party has obtained (or will obtain before the execution of the Transaction
Documents) all internal authorizations and consents which are necessary for
the execution, delivery and performance of the Transaction Documents in
accordance with its articles of association, other relevant organizational
documents or the provisions of the PRC laws;
(4) All factual statements made in the Transaction Documents (including but not
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limited to the representations in the Trust Agreement regarding the Asset Pool,
but except for the representations and warranty related to the legal questions
to which the legal opinion is given in this legal opinion) are true, correct and
complete, without any false record, misrepresentation or material omission;
(5) According to the Trust Agreement, the Trust consideration of the Asset Pool
paid or delivered to the Settlor by the Trustee is no lower than the fair market
value of the Asset Pool;
(6) The Settlor is solvent at the time the Settlor enters into the Trust Agreement
and entrusts the Asset Pool to the Trustee according to the Trust Agreement,
and neither the Trustee nor the Settlor has reasons to believe that the Settlor
will become insolvent in the reasonably foreseeable future;
(7) The Settlor’s entrustment and transfer of Asset Pool to the Trustee will not
cause any prejudice to any interests of Settlor’s creditors. The Asset Pool
transferred by the Settlor according to the Trust Agreement does not constitute
all of the assets owned by the Settlor whether in its form or substance;
(8) The execution of the Transaction Documents by the parties reflects the genuine
intention of such parties and is free of any illegal or fraudulent purpose;
(9) There does not exist any fact or other arrangement between the parties to the
Transaction Documents, which would affect the legal force of any provsison
and clause of the Transaction Documents or affect Zhong Lun’s legal opinions
issued hereunder;
(10) The terms of the Trust Agreement, the Definition Schedule, the Servicing
Agreement, the Fund Custody Agreement and the other Transaction
Documents required to be performed after the Trust Effective Date will
continue to be observed and performed from the effective date of such
Transaction Documents.
Zhong Lun’s Legal Opinions are based on the following declarations:
(1) The legal opinion is confined to and given on the basis of the facts occurred or
existing and the currently effective laws and administrative rules of the PRC
(excluding for the purpose of this project Hong Kong Special Administrative
Region, the Macao Special Administrative Region, and the Taiwan region,
hereinafter as the same) as of the date hereof. The opinion on the legality and
validity of the Transaction Documents is given based on the laws and
administrative rules applicable on the date of occurance of such event with
fully consideration of the approvals, confirmations and registration records
issued by relevant Government Authorities.
(2) Zhong Lun’s legal opinion is limited to the legal issues in respect of this Project
(confined to the matters addressed in this legal opinion), Zhong Lun does not
express any comments on the matters related to accounting, auditing, tax and
credit rating, etc. Any context of the legal opinion referring to the accounting,
auditing, tax or credit rating matters is literally quoted from the report issued
by the relevant agency, which does not indicate any express or implied
comment, opinion or guarantee of Zhong Lun on the authenticity and accuracy
of such context.
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(3) Zhong Lun does not make any prediction or give any comment or advice on
the change or revision of relevant laws, administrative rules, regulations or
policies.
(4) Zhong Lun’s knowledge and understanding of relevant facts in the legal
opinion are finally based on the authenticity, legality, integrity, accuracy and
effectiveness of the documents, materials and explanations provided by
TGBAFC and FOTIC.
(5) Zhong Lun has not investigated the laws of any other jurisdictions outside the
PRC, neither does Zhong Lun provide any express or implied opinion on such
laws. Zhong Lun further assumes the laws of such other jurisdictions would
not affect the opinions expressed in the legal opinion in any aspect.
(6) The legal opinion only expresses opinions on legal matters (to the extent
addressed in the legal opinion) in the context of the laws of PRC. Zhong Lun
does not give any opinion or comment on the other matters (including but not
limited to the legal matters related to the laws of other jurisdictions and the
matters not addressed in this legal opinion) in any form or in any sense.
(7) The legal opinion is provided to TGBAFC and FOTIC for purpose of this
Project only; Zhong Lun agrees TGBAFC and FOTIC to provide the legal
opinion to the Principal Underwriters and other intermediaries for the purpose
of issuing the Notes; the legal opinion is not allowed to be used for any other
purpose without Zhong Lun’s prior written consent.
(8) For the auditor or the accountant to judge or confirm whether the transfer of
the Asset Pool satisfies the requirement for the off-balancesheet treatement
under the generally accepted accounting principles, and to the extent of using
the legal opinion as the evidence to support the judgment by the auditor or the
accountant, TGBAFC may disclose the legal opinion (including all
assumptions and declarations therein, not just the conclusion thereof) to its
auditor or accountant. However, Zhong Lun does not thereby assume any
liability or obligation to the auditor or the accountant or any liablity in
connection with the financial statements of TGBAFC or its affiliations.
Based on the assumptions and declarations above, Zhong Lun hereby presents
their legal opinions pursuant to the current PRC Laws and in accordance with the
practice standard, moral rules and in the spirit of diligence generally accepted by the
legal profession:
(1) TGBAFC is a limited liability company incorporated under PRC Laws, and
has the capacity of civil right and full capacity of civil act and the qualification
as a special-purpose trustee to execute, deliver, and perform the Definition
Schedule, the Trust Agreement, the Servicing Agreement and the Underwriting
Agreement, to which it is a party; TGBAFC’s execution, delivery and
performance of the aforementioned Transaction Documents will not violate the
current PRC laws, administrative regulations applicable to TGBAFC. Upon
satisfaction of all entry-into-force conditions under such agreements, such
agreements will constitute legal, valid and binding obligations of TGBAFC.
Relevant parties to such agreements can claim corresponding rights against
TGBAFC in accordance with the clauses and provisions under the agreements,
unless such claim is subject to the limitation by laws relating to bankruptcy
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liquidation, reorganization, or settlement that could affect the creditor’s rights
or by any other similar laws.
(2) FOTIC is a limited liability company incorporated under PRC Laws, and has
the capacity of civil right and full capacity of civil act to execute, deliver, and
perform the Definition Schedule, the Trust Agreement, the Servicing
Agreement, the Fund Custody Agreement and the Underwriting Agreement, to
which it is a party; FOTIC ’s execution, delivery and performance of
aforementioned Transaction Documents will not violate the current PRC laws,
administrative regulations applicable to FOTIC . Upon satisfaction of all entry-
into-force conditions under such agreements, such agreements will constitute
legal, valid and binding obligations of FOTIC. Relevant parties to such
agreements can claim corresponding rights against FOTIC in accordance with
the clauses and provisions under the agreements, unless such claim is subject
to the limitation by laws relating to the bankruptcy liquidation, reorganization,
or settlement that could affect the creditor’s rights or by any other similar laws.
(3) Other parties contemplating to enter into the Fund Custody Agreement, the
Underwriting Agreement are validly existing and have full legal capacity for
civil right and civil conduct to execute, deliver and perform such Transaction
Documents; such parties’ execution, delivery and performance of the aforesaid
Transaction Documents will not violate the current laws, administrative
regulations of PRC; such Transaction Documents will constitute legal, valid
and binding obligations of the parties after the effective conditions agreed in
the respective Transaction Documents are fully satisfied. The relevant parties
of such Transaction Documents can claim their rights against the other
counterparties pursuant to the clauses thereof, unless such claims are limited
by restrictions of bankruptcy, restructuring, reconciliation or other PRC Laws
related to or affecting the rights of creditors.
(4) Except for the following matters, TGBAFC and FOTIC are not required to
obtain any other approvals, permissions, authorizations, consents of any
Government Authorities for the execution, delivery and performance of the
Transaction Documents as the parties thereto:
i.The registration by the CBIRC for TGBAFC, as the Originator, to entrust
its legally held creditor’s rights to the auto mortgage loans and the Security
Rights and Interests to the Trustee according to the Trust Agreement for
issuance of the Notes to the investment institutions by the Trustee.
ii.The registration by the PBOC for the Originator and Trustee to issue Notes
on the China’s Inter-Bank Bond Market according to the Trust Agreement.
(5) After the Trust Agreement is duly signed and delivered by the respective
parties of this Project, all the entry-into-force conditions for the Trust are
satisfied, and TGBAFC delivers the Trust Property to FOTIC, the Trust will
be effectively created.
(6) Once the Trust becomes effective and the Trust Property has been actually
delivered or transferred to the Trustee, the Trust Property will be isolated from
other properties of TGBAFC which are not entrusted. But all of the Collections
generated and received by the Originator from the Cutoff Date (exclusive) to
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the Trust Effective Date (inclusive) shall become the Trust Property that is
isolated from other perperties of the Originator which are not extrusted after
the Originator actually delivered such Collections to the Settlor. If TGBAFC
is not the sole Beneficiary when it is dissolved, terminated or declared
bankrupt according to laws, the Trust will survive; only the Subordinated
Notes and the Special Trust Beneficial Right held by TGBAFC, rather than the
Trust Property, will be the liquidating property of TGBAFC. If all payables on
the Senior Notes are paid in full and TGBAFC is the sole Beneficiary as the
Subordinated Noteholders and the Special Trust Beneficiary then, the Trust
will terminate and the Trust Property will be TGBAFC’s liquidating property.
The Trust Property is also distinguished form the properties of the Trustee.
When the Trustee is dissolved, terminated or declared bankrupt according to
laws, the Trust Property will not be its liquidating property.
(7) The Notes issued by the Trustee according to the Trust Agreement represent
the corresponding portion of the Trust Beneficial Right only. Such Notes do
not constitute the Settlor’s debts, and the Settlor does not provide any warranty
or guarantee of the return of the Notes. The Settlor does not assume any
implied covenants or obligations nor make any further representations and
warranties other than those expressly stipulated in the Trust Agreement. The
Notes are not the Trustee’s debt either. Except for the losses incurred by the
Trust Property due to the wilful conduct, fraud, or gross negligence of the
Trustee, the Trustee will only be obligated to pay the Trust Benefits to the
Noteholders to the extent of the the Trust Property in accordance with the Trust
Agreement, without any warranty or guarantee of the Trust Benefits. The
recourse right of the Noteholders is limited to the Trust Property.
(8) Upon the Trust becoming effective, the transfer of the creditor’s rights held by
TGBAFC in respect of the securitized auto loans will take effect between
TGBAFC and the Trustee immediately. If any of the Right Perfection Events
occurs, after TGBAFC informing the Borrowers of the transfer of its creditor’s
rights in form of the Right Perfection Notice, such transfer will become
effective against the Borrower.
(9) Pursuant to the Article 192 of the Property Law and the Article 81 of the
Contract Law, when TGBAFC transfers its creditor’s rights in respect of the
securitized auto loans, the Mortgage Right related to the creditor’s rights will
be transferred at the same time. According to Article 188 of the Property Law,
for mortgage over vehicles, the Mortgage Right is created at the time the
mortgage contract comes into effect; however, without the registration, the
mortgage will not be effective against a bona fide third party. After the Trust
becoming effective, the Mortgage will be transferred to the Trustee along with
the principal creditor’s rights; even if the change of registaion of the Mortgages
have not been completed, the Trustee still enjoys the Mortgage Right, provided
such right cannot be claimed against a bona fide third party. To avoid the risk
mentioned above, the Originator and the Trustee have agreed in the Definition
Schedule and the Trust Agreement that in case where a bona fide third party
claims for his Mortgage Right or ownership over a Mortgage Vehicle related
to a Mortgage Loan in the Asset Pool, and the change of registation of the
Mortgage has not been completed, so that the Trustee is unable to claim its
Mortgage Right against the bona fide third party, then the related asset will be
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deemed as an Ineligible Asset, which will be repurchased by the Originator
from the Trustee according to the Trust Agreement.
(10) After the completion of the registration for this Project by CBIRC and the
completion of issuance registration for this Project by PBOC, if the parties
issue and sell the Notes in accordance with the Trust Agreement and the
Underwriting Agreement, the Notes will be legally and validly issued and sold,
and the Noteholders will be entitled to the rights, interests and benefits
stipulated in the Trust Agreement.
2. Summary of Transactions, Accounting Opinions and Tax Opinions
A. Summary of Transactions and Accounting Opinions
Deloitte Touche Tohmatsu Certified Public Accountants LLP (special general
partnership) (“Deloitte”) accepted the engagement of Tianjin Great Wall Binyin
Automotive Finance Company, Limited (hereinafter referred to as “TGBAFC”) to
provide comments on the suitability of accounting treatment opinions proposed by
TGBAFC for proposed Chang Ying 2020-2 Retail Auto Mortgage Loan Asset-backed
Securities Trust Transaction (hereinafter referred to as “Proposed Transaction”).
According to the currently effective Accounting for Business Enterprises No. 23
Transfers of Financial Assets promulgated by the Ministry of Finance of the People’r
Republic of China in March 2017 and the Accounting Standard for Business Enterprises
No. 33 Consolidated Financial Statements promulgated in February 2014 (hereinafter
collectively referred to as the “Accounting Standards”), Deloitte provides comments on
the accounting treatment opinions proposed with respect to the treatment that whether
the special-purpose trust involved in the Proposed Transaction shall be consolidated
with TGBAFC’s financial reports and whether the financial assets for the Proposed
Transaction shall be derecognized.
The object of the Report of Comments on Accounting Treatment Opinion is the
accounting treatment opinions proposed by TGBAFC for the Proposed Transaction.
According to the Proposed Transaction, TGBAFC is about to entrust a batch of
specialized auto mortgage loans and related security rights and interests (hereinafter
referred to as “Underlying Assets”) owned legally by itself to China Foreign Economy
and Trade Trust Co., Ltd. (hereinafter referred to as “Trustee” or “Issuer”), the Trustee
shall establish a special-purpose trust (or referred to as “Trust”) to hold the Underlying
Assets in accordance with the Trust Agreement for Chang Ying 2020-2 Retail Auto
Mortgage Loan Securitization Trust. The Trustee will issue the Notes. The Noteholders
will be entitled to the trust beneficial right arising from the Underlying Assets.
Deloitte’s Report of Comments on Accounting Treatment Opinion is mainly based
on the accounting treatment opinions with respect to the treatment that whether the
special-purpose trust involved in the Proposed Transaction shall be consolidated with
TGBAFC’s financial reports and whether the financial assets for the Proposed
Transaction shall be derecognized, the facts, conditions and assumptions related to the
Proposed Transaction, provided by TGBAFC, and such report is comments on the
accounting treatment opinion proposed by TGBAFC in accordance with the provisions
relating to financial assets derecognization and consolidated statement stipulated in
Accounting for Business Enterprises No. 23 Transfers of Financial Assets (hereinafter
referred to as “ASBE 23”) promulgated by the Ministry of Finance of the People’r
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Republic of China in March 2017 and the Accounting Standard for Business Enterprises
No. 33 Consolidated Financial Statements (hereinafter referred to as “ASBE 33”)
promulgated in February 2014.
The management group of TGBAFC (hereinafter referred to as “Management
Group”) hold the opinion that the Proposed Transaction will result in the special-
purpose trust consolidated into the consolidated financial statements of TGBAFC;
TGBAFC and the Trust consolidated (collectively referred to as “Group”) almost retain
all the risks and rewards of the ownership of the Underlying Assets, the Underlying
Assets shall not be derecognized.
Based on the Proposed Transaction described in the accounting opinion and the
understanding of relevant Accounting Standards abovementioned, TGBAFC, as the
Originator and the Servicer, is able to lead the activities that might have materially
influence on the returns of Trust, especially supervising the payment of the Underlying
Assets and take necessary collection or disposal measures when the Borrowers default.
Deloitte agrees the opinions of TGBAFC that TGBAFC is entitle to the variable returns
arising from the special-purpose trust. According to Transaction Documents,
synthetically considering the relevant facts and situations including the relationships
between TGBAFC and the special-purpose trust and other parties, relevant rights
enjoyed by TGBAFC and other parties, the amount of service fees for TGBAFC as the
Servicer, and material risks of the variable return exposure faced by TGBAFC for
holding all the Subordinated Notes, Deloitte agrees the opinions of TGBAFC that
TGBAFC is able to influence the variable returns it receives by exercising the
substantive power it enjoys over the special-purpose trust. Based on abovementioned,
synthetically considering control factors stipulated in ASBE 33, Dolitte agrees the
opinions of TGBAFC that TGBAFC enjoys the substantive power over the special-
purpose trust and variable returns, alse, TGBAFC has the ability to exercise the
subtantive power it enjoys over the special-purpose trust to influence the variable
returns it receives. Thus TGBAFC can control the special-purpose trust, and it shall
consolidate the special-purpose trust as preparing the consolidated financial statements.
According to the Transaction Documents, as the Servicer, TGBAFC has the right
to collect payments from the debtors, and has the obligation to transfer such Collections
to the Trust Account. Meanwhile, the special-purpose trust shall make payment to the
Noteholders with relevant collections after deducting related expenses on the Payment
Dates, according to the stipulations of the Trust Agreement. According to te Transaction
Documents provided by TGBAFC, TGBAFC has no extra pecuniary obligations
besides transfering the cash Collections generated from the Trust, paying relevant
amounts, if any, for repurchasing the Ineligible Assets and the Clean-up Call. Ineligible
Assets repurchase is only limited the assets that fail to meet the Eligibility Criteria as
of the Cutoff Date and the Trust Effective Date, TGBAFC holds the opinion that as of
the Cutoff Date and the Trust Effective Date, all the Underlying Assets under the
Proposed Transaction meet the Eligibility Critertia, and the opinion that TGBAFC is
able to perform its duty as the Servicer diligently, and the registration for transfer of the
Security Rights and Interests usually can be conducted timely pursuant to the contracts;
Clean-up Call is an option for TGBAFC and the assets shall be repurchased at market
price. Therefore, Deloitte agrees that the item 1 of Section 6 Provision 2 of the ASBE
23 is satisfied, i.e. only if the enterprise has received equivalent cash flow from such
financial assets, it is obliged to pay such amount to the final payee.
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Based on the Proposed Transaction described in the accounting opinions, the
understanding of the abovementioned Accounting Standards, and the calulation results
of riskmetris model provided by the management group, Doloitte agrees the opinions
of TGBAFC that TGBAFC shall consolidate the special-purpose trust into its
consolidated financial statements; under the Proposed Transaction, the Collections
received cannot be transferred to the investors timely, which does not satisfy the
requirements for transfer of financial assets, besides, TGBAFC retains almost all the
risks and rewards of the ownership of the Underlying Assets, thus the Underlying Assets
shall not be derecognized.
B. Summary of Tax Opinions
According to the China Tax Opinions on the Transaction Structure of Chang Ying
2020-2 Retail Aoto Mortgage Loan Securitization Trust provided by Shanghai Deloitte
Tax Ltd. Beijing Office (representing Shanghai Deloitte Tax Ltd.), the tax treatment
analysis of the parties involved in Chang Ying 2020-2 Retail Auto Mortgage Loan
Securitization is as follows:
For all the trading links of the retail auto mortgage loan securitization trust, the
types of taxes invovled for the parties of such transaction include value added tax,
corporate income tax and stamp duty.
Hereinafter, Shanghai Deloitte Tax Ltd. Beijing Office provides its tax opinions
with respect to the tax types on the taxation obligation for each of the parties in the
transaction according to the regulations including No. 5 [2006] of the Ministry of
Finance1, No. 36 [2016] of the Ministry of Finance, No. 140 [2016] of the Ministry of
Finance and No. 56 [2017] of the Ministry of Finance. According to No. 36 [2016] of
the Ministry of Finance, since from May 1, 2016, pilot program of replacing business
tax with Value-Added Tax (VAT) shall be implemented across the country, all business
tax taxpayers shall be included in the scope of the pilot program, and the payment of
business tax shall be replaced by the payment of VAT.
Value Added Tax (“VAT”)
1. TGBAFC, as the Settlor of the retail auto mortgage loan securitization trust,
entruts China Foreign Economy and Trade Trust Co., Ltd. to establish the Trust
with its retail auto mortgage loans. As for the transfer of its retail auto mortgage
loans by TGBAFC during the establishment of the Trust, as of the date when
the tax opinions issued, Shanghai Deloitte Tax Ltd. Beijing Office has not yet
found out any regulations among the current regulaitons and regulatoty
documents related to VAT that require the transferor to pay VAT for the
abovementioned behavior.
2. The interests generated from the retail auto mortgage loans assets of the Trust
project are subject to VAT.
1 No. 5 [2006] of the Ministry of Finance is a taxation regulation document regarding to the issuance of credit
asset securitiation products approved by CBRC according to the Administrative Measures for the Securitization of
Credit Assets. Considerting Chang Ying 2020-1 Retail Auto Mortgage Loan Securitization Trust Program is
proposed according to relevant regulations of CBRC, and the transaction structure is consistent with that of credit
asset securitization described in the No. 5 [2006] of the Ministry of Finance, Shanghai Deloitte Tax Ltd. Beijing
Office holds the opinion that such document is applicable to this project.
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3. According to NO. [2016] 140 of the Ministry of Finance, for the VAT taxable
acts during the business operation process of an asset management product, the
managers of the asset management product shall be the VAT taxpayer.
According to NO. [2017] 56 of the Ministry of Finance, the VAT taxable
activities carried out by the managers2 of the asset management products3
during the operation of the asset management products shall be subject to VAT
at the levy rate of 3% for the time being through the simple tax computation
method. Where no VAT is paid on the taxable activities that occur before
January 1, 2018 during the operation of the asset management products, VAT
shall no longer be paid; where the VAT has already been paid, the amount paid
may be credited against the VAT payable of the manager of asset management
products in the upcoming months. Therefore, since from January 1, 2018,
during process of the retail auto mortgage loan asset securitization, the VAT
taxable incomes (if any) obtained during the operation of the trust project shall
be subject to VAT, and the China Foreign Economy and Trade Trust Co., Ltd.
as the manager of the asset management product shall be the VAT taxpayer.
4. During the process of asset securitization, the service fees received by the
Servicer, the Trustee, the Notes Custodian and other VAT taxable service
providers for the retail auto mortgage loan securitization transaction shall be
subject to VAT according to VAT relevant policies.
5. If any returns received by the financial insitutional investors (including the
banking and non-banking financial institutions) and non-financial institutional
investors during the period (maturity date included) of holding the retail auto
mortgage loan securitization trust (beneficial rights) are principal-guaranteed,
then which shall be deemed as loan service, and such interest incomes shall be
subject to VAT4.
6. For the Special Trust Beneficial Right authomatically obtained by the Servicer
after providing the Commingle Reserve Amount, if the behavior to receive the
incomes during the period of holding the retail auto mortgage loan
securitization trust (beneficial right) (maturity date included) was deemed to
provide loan service, then such incomes shall be subject to VAT.
7. The spread between the selling price and the purchasing price received by the
2 NO. [2017] 56 of the Ministry of Finance provides that the managers of asset management products include
banks, trust companies, public fund management companies and their subsidiaries, securities companies and their
subsidiaries, futures companies and their subsidiaries, private equity fund managers, insurance asset management
companies, professional insurance asset management institutions, pension insurance companies, and other
managers of asset management products specified by the Ministry of Finance and the State Administration of
Taxation. 3 NO. [2017] 56 of the Ministry of Finance provides that the asset management products include the banks' wealth
management products, fund trusts (including collective fund trusts and single fund trusts), property right trusts,
publicly offered securities investment funds, asset management plans for specific clients, collective asset
management plans, directional asset management plans, private equity investment funds, debt investment plans,
equity investment plans, plans for investments that integrate equities with debts, asset-backed plans, insurance
asset portfolio management products, pension security management products, and other asset management
products specified by the Ministry of Finance and the State Administration of Taxation. 4
NO. [2016] 36 of the Ministry of Finance provides that any incomes from employing and lending funds, the
interests (including guaranteed income, payment, expenses for using funds, compensation etc.) received during the
period (maturity date included) of holding the financial instrument, interest income from the overdraft of credit
cards, interest income from the reverse repurchase of financial commodities, interest income from margin trading
and short selling, and interest and interest income obtained from financing sale and leaseback, documentary credit,
default interest, discount of bills, relending and other business, shall be subject to VAT at the rate for loan services.
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financial institutional investors as incomes (including the banking financial
institutions and the non-banking financial institutions) for purchasing and
transfering the retail auto mortgage loan securitization trust (beneficial righs)
shall be subject to VAT5.
Corporate Income Tax (“CIT”)
(1) The CIT imposed on the income derived from the transfer of the retail auto
mortgage loan assets by TGBAFC, as the Originator shall be calculated and
paid in accordance with the CIT policy, and the losses incurred in the transfer
of the retail auto mortgage loan assets can be deducted according to the CIT
policy. Repurchase or replacement of the retail auto mortgage loan assets have
been transferred by TGBAFC shall be subject to CIT in accordance with the
current relevant CIT regulations with respect to transfer and receive of assets.
(2) TGBAFC, as the Originator, and China Foreign Economy and Trade Trust Co.,
Ltd., as the Trustee, shall pay the charges or fees at arm’s length prices as that
between the independent enterprises during the process of transfer, repurchase
or replacement of assets; where the receipt or payment of charges or fees is not
made at arm’s length prices, the tax authorities have the right to make
adjustments according to the Tax Collection Administration Law of the
People’s Republic of China.
(3) According to the Trust Agreement, the Trustee shall calculate the amounts in
each accounts under the Trust Account on each Trust Distribution Date, the
principal and interest payable on the Notes for the current period on the first
Payment Date (or other dates stipulated by PRC Laws and the Transaction
Documents) after such Trust Distribution Date, the Trust Expenses and other
amounts, and distribute or use such amounts according to Section 9 of the Trust
Agreement. The portion of incomes obtained and allocated to the institutional
investors of the Notes (hereinafter referred to as “Institutional Investors”) in
the year of acquisition shall not be subject to CIT during the process of
entrusting for the time; the Institutional Investors shall confirm the taxable
income according to the principle of accrual basis after the Institutional
Investors receives the incomes derived from the trust project, and calculate and
pay CIT in accordance with the CIT policies. For the portion of incomes
derived from the trust project but is not allocated to the institutional investors
in the year of acquisition, the Trustee shall declare and pay CIT in accordance
with the policy on CIT in the process of entrusting; when the incomes after tax
during the process of entrusting are allocated to the Institutional Investors, the
Institutional Investors shall refer to the current policies on CIT with respect to
the acquisition of income after tax.
(4) The incomes derived from the spead of purchase and transfer of retail auto
5 NO. [2016] 36 of the Ministry of Finance provides that the transfer of financial commodities shall be subject to
VAT. Transfer of financial commodities include the transfer of funds, trust and wealth management commodities
and a variety of other asset management products and financial derivatives. In the transfer of financial products,
the sales amount of such products shall be the balance of the selling price thereof minus the purchase price thereof.
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mortgage loan securitization trust (beneficial right) by the Institutional
Investors shall be subject to CIT in accordance with the policies on CIT, and
the losses incurred in the transfer of the retail auto mortgage loan trust
(beneficial rights) can be deducted according to the CIT policies. The incomes
derived from the liquidation of the trust project by the Institutional Investors
shall be subject to CIT according to CIT policies, and the losses incurred in
the liquidation process can be deducted according to relevant CIT policies.
(5) In the transaction of the retail auto mortgage loan securitization trust, the
service fees or commissions received by TGBAFC as the Servicer, China
Foreign Economy And Trade Trust Co., Ltd. as the Trustee, Industrial and
Commercial Bank of China Limited Tianjin Branch as the Fund Custodian,
China Central Depository & Clearing Co., Ltd. or any other institution
designated by Government Authorities to provide registration and custody
services for the Notes as the Notes Custodian, and other insitutions provide
service for the retail auto mortgage loan securitization transaction shall be
included into their taxable incomes respectively and imposed CIT at applicable
taxation rate.
(6) The incomes derived from the Special Trust Beneficial Rights obtained
authomatically after TGBAFC, as the Servicer, provides the Commingle
Reserve Amount, shall be included into its taxable incomes and imposed CIT
at applicable taxation rate.
(7) hina Foreign Economy And Trade Trust Co., Ltd., as the Trustee, and China
Central Depository & Clearing Co., Ltd. or any other institution designated by
Government Authorities to provide registration and custody services for the
Notes as the Notes Custodian shall submit all the financial information and
detailed information regarding to the allocation of the incomes to the
Institutional Investors to the competent tax authorities of the trust project and
local tax authorities of the location where the Institutional Investors locate.
The analysis above with respect to CIT is based on the former corporate income
tax law6, as of the opinion issued by Shanghai Deloitte Tax Ltd. Beijing Office,
there are no explicit provisions regarding to relevant matters above in the
amended corporate income tax law, nor has the amended corporate income tax
law 7 clearly provided whether the analysis above is applicable under it.
According to the anonymous communication between Shanghai Deloitte Tax
Ltd. Beijing Office with some tax authorities, relevant officials hold the opinion
that the treatment above on CIT does not violate the amended corporate income
tax law, and shall be applicable. Shanghai Deloitte Tax Ltd. Beijing Office
recommends TGBAFC to confirm with the competent tax authorities the
applicability of regulations above under the amended corporate income tax law
6 “The former corporate income tax law” means the Provisional Regulations of the People’s Republic of China on
Corporate Income Tax, Corporate Income Tax Law of the People’s Republic of China for Enterprises with Foreign
Investment and Foreign Exterprises and relevant provisional regulations that were effective before January 1,
2008. 7 “The admended corporate income tax law” means the Corporate Income Tax Law of the People’s Republice of
China and relevant provisional regulations that went into effective from January 1, 2008.
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before TGBAFC carries out specific projects.
Stamp Duty (“SD”)
(1) The Trust Agreement entered into between TGBAFC, as the Settlor, and China
Foreign Economy and Trade Trust Co., Ltd., as the Trustee, is exempted from
SD temporarily.
(2) The Servicing Agreement signed between the Trustee (China Foreign Economy
and Trade Trust Co., Ltd., and the Servicer (TGBAFC) for managing the credit
asset is exempted from SD temporarily.
(3) Other taxable agreements signed between the Settlor TGBAFC, the Trustee
China Foreign Economy and Trade Trust Co., Ltd. during the trust
securitization process, with the Fund Custodian, Notes Custodian China
Central Depository & Clearing Co., Ltd. or any other institution designated by
Government Authorities to provide registration and custody services for the
Notes, the Settlor TGBAFC and the Trustee China Foreign Economy and Trade
Trust Co., Ltd. are exempted from SD temporarily.
(4) The action of issuing retail auto mortgage loan asset-backed securities by the
Trustee China Foreign Economy and Trade Trust Co., Ltd. and the action of
purchasing the retail auto mortgage loan asset-backed securities by the
Institutional Investors are exempted from SD temporarily.
(5) The account books established by the Settlor TGBAFC and the Trustee China
Foreign Economy and Trade Trust Co., Ltd. especially for the retail auto
mortgage loan asset securitization trust are exempted from SD temporarily.
Above is the tax opinion issued by Shanghai Deloitte Tax Ltd. Beijing Office with
respect to the transaction structure of Chang Ying 2020-2 Retail Auto Mortgage
Loan Securitization Trust referring to the spirit of the Notice of the Ministry of
Finance and the State Administration of Taxation on Relevant Issues concerning
Taxation Policies on the Securitization of Credit Assets (No. 5 [2006] of Ministry
of Finance) and in accordance with the currently effective tax laws of PRC
including the Notice of the Ministry of Finance and the State Administration of
Taxation on Implementing the Pilot Program of Replacing Business Tax with
Value-Added Tax in an All-round Manner (NO. 36 [2016] of Ministry of Finance),
the Notice of the Ministry of Finance and the State Administration of Taxation on
Specifying the Value-added Tax Policies for Finance, Real Estate Development,
Educational Support Services, etc. (NO. 140 [2016] of Ministry of Finance) and
the Notice of the Ministry of Finance and the State Administration of Taxation on
Issues concerning the Value-Added Tax on Asset Management Products (NO. 56
[2017] of Ministry of Finance). Such tax opinion is only for referrence, and does
not indicate all the information needed for relevant interested party to evaluate
the business, financial situation, operation and taxation of TGBAFC, nor is
explained as any investment advice or suggestions provided by Shanghai Deloitte
Tax Ltd. Beijing Office. Correspondingly, potential investors shall ask for
professional advice conerning to their own specific situation prior to making
investment decision or any other decision. Shanghai Deloitte Tax Ltd. Beijing
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Office, including its partners, employees and agents, do not make any express or
implied statements or warranties, nor do bear any obligation or responsibility
(including but not limited to liability due to negligence) including reasonable care
for any investor or relevant interested party.
3. Summary of Credit Ratings Assumption and Analysis
A. Summary of Credit Ratings by CBR
The rating of the Chang Ying 2020-2 Retail Auto Mortgage Loan Asset-backed
Securities by CBR takes into consideration the credit quality of the underlying asset,
credit enhancement and transaction structure, with quantitative analysis through
composition credit risk analysis model and cash flow model.
CBR holds the opinion that, in respect to the underlying asset, the loans in the asset
pool for the securities have characteristics of very low weighted average interest rate,
longer remaining term, however the concentration risk of the Underlying Assets is
relatively low, the distribution of Borrower age is reasonable, and the career and income
condition of the borrowers are in the uptrend, the Borrowers have relatively strong
willingness to pay the debts, and the loans involved in the Underlying Assets of this
securitization are equipped with new vehicles mortgage, so the general credit quality of
the Underlying Asset is good. In respect to the credit enhancement, the Senior Notes
gain credit support provided by the Subordinated Notes and the over-collateralization,
which is equal to 14.33% of the outstanding principal balance of loans in the Asset Pool
as of the Cutoff Date. In respect to the transaction structure, the risk relating to offset,
commingle, vacancy of the Servicer and other risks relating to the transaction structure
is relatively low due to the participants are competent, thus the general risk relating to
the transaction structure is relatively low.
Taking into consideration of the calculation results of the rating model, CBR
confirms that the ratings of the Notes are: AAAsf for the Class A1 Notes, AAAsf for
the Class A2 Notes, and the Subordinated Notes are not rated.
(a) Strengths
The concentration risk of the Underlying Asset is relatively low. The nummber
of the loans in the Asset Pool is huge ,which it 69,512, And the biggest outstanding
principal of a single loan is RMB 175.4 thousand Yuan and accounted for less that
0.01%, and the single loan amount concentration is very low, in some degree, reducing
the risk of substantial losses resulted from the default of single loan. The Borrower’s
area involves 31 provinces, autonomous regions, and municipalities, among which the
highest loan balance of the region is accounted for 11.34%, and the regional
concentration is at a middle level; for the pooled assets, the four brands involved include
Haval, WEY, GWM and ORA, among which the brand with the largest loan balance is
Haval, accounting for 75.90%, thus the brand concentration is very high. Considering
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the good operating performance of the Originator; overall, and the concentration risk
of the Underlying Assets is relatively low.
The Borrowers’ capacity is relatively strong. The weighted average age of the
Borrowers of the pooled assets is 32.53 years old, and Borrowers during such age range
usually in the uptrend regarding to the career and income, thus the willingness to pay
the debts is relatively strong. Besides, the weighted average income-to-debt ratio of
Borrowers of the pooled assets is 3.45 times, which indicates a relatively strong capacity.
The tranche of Senior Notes/Subordinated Notes/over-collateralization
provides a good credit support to the Senior Notes. The Senior Notes gain the credit
support provided by the Subordinated Notes and the initial over-collateralization which
is equal to 14.33% of the outstanding principal balance of the loans in the Asset Pool
as of the Cutoff Date.
The risk related to the transaction structure is relatively low. The Accelerated
Payment Event, Event of Default and other credit trigger mechanism are set for the
Notes, which provides protection for the repayment of the Senior Notes. The business
scope of auto finance company which is the Originator of the Notes does not include
individual deposit, and offset dealing terms will turn the offset risk into default risk of
the Originator, considering the long-term corporate rating of the Originator is high, the
offset risk is low. The Liquidity Reserve Account is set up for this securities, which
requires for each Trust Distribution Date, which provides the Required Liquidity
Reserve Amount is equal to one per cent (1%) of the aggregation of the Outstanding
Principal Balance of all the Mortgage Loans in the Asset Pool as of the end of the
Collection Period before such Trust Distribution Date. Also, the Commingle Reserve
Account is set up for this project, which requires the Commingle Reserve Amount being
withdraw and deposited to the corresponding reserve account to mitigate the liquidity
risk and commingle risk after the Servicer lose any of the Required Ratings.
Additionally, the frequency of transferring the Collections shall depend on the credit
ratings of the Servicer. Considering the long-term corporate rating of the Servicer is
relatively high, the commingle risk is relatively low. Overall, the transaction structure
of this securities is relatively low.
(b) Concerns
Some of the characteristics and the circumstances such as the macro-economy
situation, characteristic term of the static sample pool may be different from that
of the pooled assets, and the number of static sample pool is relatively small due
to the Originator has established for a relatively short time, which may result in a
deviation of the estimated default distribution perimeter. The Originator started its
auto finance business officially since from 2004, which lasts for a short term, CBR built
41 static sample pools according to the statistics related to the static samples provided
by the Originator. And the difference of macro-economy situation experienced by the
static sample pool and the Asset Pool may result in the deviation of the estimated default
distribution of the underlying Asset Pool. In the combined credit risk model,
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considering such risk factors, CBR has adjusted the parameters relating to the default
distribution respectively.
The percentage of pooled loans with zero (0) interest rate is relatively high,
and the weighted average interest rate is at a very low level. Among the pooled
assets for this securities, the number of loans with zero (0) interest rate is 53,314, and
the percentage of the Outstanding Principal Balance of such loans is 71.58%, and the
weighted average interest rate for the Assets Pool is 2.26%; the net interest incomes
after deducting expenses and fees related to the interests provide limited support for the
securities, which is relatively easy to be influenced by the actual issuing coupon rate.
Risks resulted from the failure to file registration of change in mortgages. As
of the transfer of the Trust Property by the Originator, it will not file registration of change
in mortgage and will continue to be registered as the Mortgagor on behalf of the Trust with
relevant registration authority. If a Mortgage Loan is in default and enforcement of the
Mortgage Right is called for, such Mortgage Right may not be enforceable against a
bona fide third party. The Transaction Documents provide that if the Mortgage Right
held by the Trustee is subordinated to the right of a bona fide third party, and such
situation is not able to be corrected during a specified period, the Originator shall
repurchase the relevant assets during a reasonable period after the Trustee submit a
written repurchase request, which to some extent mitigate the risks resulted from the
failure to file registration of change in mortgages as of the transfer of the Mortgage
Right.
The macro economy faces significant downward pressure and may have an
adverse impact on the Underlying Assets’ future credit performance. Since 2019,
due to the external environment and insufficient domestic demand, the global economic
growth rate is 6.1%, decreased 0.6 per cent from the year 2018. From the view of
production, industrial production has not improved, currently the cumulative growth
rate of industrial added value is already at the bottom of the fluctuation range, the profits
of industrial enterprises are still at a low level. On the demand side, the growth rate of
real estate investment maintains resilience, of infrastructure investment tends to be
stable at a low level, while the growth rate of manufacturing investment has dropped
significantly, and the overall investment has fallen steadily; the growth rate of
consumption and net exports has declined, however the trade balance still contributes
positively to the economic growth. From a middle-to-long-term perspective, with the
slowing growth speed of the aging population and the labor force, the potential
economic growth rate has fallen. In the short-term, the problem of high leverage on
domestic debt and the momentum of consumption growth is starting to weaken, which
has a certain impact on China's economic growth. The impact of the ourbreak of
COVID-19 on the economy will concentrate on reflecting in the first quarter, the
influence of the epidemic to the whole-year economy is controllable. From the
perspective of the automobile consumption, looking back 2019, the vehicle sales keeps
falling due to the slow-down of the comsuption growth, but the year-on-year decline
amplitude obviously decreases due to the stimulation of the comsumption boosting
policies, the fading of the wait-and-see attitude towards the switch of national stadards
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for vehicles and other factors. The vehicle sales of the forth quarter of 2019 decreased
by 2.5% from the last year, and the decline decreased by 3 per cen compared to the
decline of the third quarter. The supply structure of the supply sector has not changed
significantly, the prosperity index continued to decline. The epidemic has a significant
short-term impact on consumption. In the first quarter, auto sales activities were subject
to more compulsory contracts; the growth rate of the residents’ real disposable income
continued to be lower than the actual economic growth rate, which formed a certain
restraint on the automobile consumption capacity. The situation that the negative
growth of the passenger vehicle industry will remain in a short term is expected to
continue, and the epidemic is expected to amplify the negative effects. But what needs
to be concerned is that the government may introduce relevant policies to stimulate
automobile consumption, which may have a certain boost to demand. Therefore, the
differentiation of the corporate credit risk in the automotive industry may further
intensify, and auto finance companies may also face certain risks of asset quality
sinking. CBR has adjusted the default distribution index of the underlying assets based
on such risk factor.
A. Summary of the Credit Ratings by CCXI
China Chengxin International Credit Rating Co., Ltd. (hereinafter referred to as
“CCXI”) gives the following ratings for the Chang Ying 2020-2 Retail Auto Mortgage
Loan Asset-backed Securities based on the information obtained as on June 5, 2019 and
before. The following rating indicates the expected losses degree and the possibilities
of the interests getting paid on time and the principal being paid off before the Final
Maturity Date of the Senior Notes, but do not constitute any suggestion for the investors
to purchase or holding such Notes.
(a) Strengths of this Transaction
(1) The senior/subordinated payment mechanism is adopted in this transaction for
the payment of interest and principal, and the Senior Notes gains 14.33%
credit enhancement from the Subordinated Notes and over-collateralization.
(2) The over-collateralization is set up for this transaction, and the initial over-
collateralization is 3.12%, which provides credit support for the Senior Notes
in some degree.
(3) The pooled assets are the retail auto mortgage loan disbursed by TGBAFC,
the total number of the loans is 69,512 and of the Borrowers is 69,507; the
average Outstanding Principal Balance of single loan is RMB 50 thousand
Yuan; the highest Outstanding Principal Balance of single loan is RMB 175.4
thousand Yuan; the Asset Pool pincipal balance distribution degree is high.
(4) As of the Cutoff Date, the pooled assets are normal loans according to the
five-categories classification set by China Banking and Insurance Regulatory
Commission. As of the Cutoff Date, the weighted average paid term of the
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Asset Pool is 6.91 months. The assets are in good quality, and the credit
performance is good.
(5) According to the transaction, on each distribution date, the Trustee shall
transfer corresponding amount to the Liquidity Reserve Account, ensuring the
balance in such account is no less than the Requried Liquidity Reserve
Account, which provides liquidity support for each tranche of Notes in some
degree.
(6) The Originator and Servicer, TGBAFC, established in May 2014, was a
limited-liability company invested to establish by Great Wall Motor Co., Ltd.
and Tianjin Binhai Rural Commercial Bank Co., Ltd. Since from its
establishment, TGBAFC’s auto finance business develops rapidly, and
achieves good risk control while achieves good profits. By the end of 2019,
the non-performing loan ratio is 0.13%, which is at a relatively good level in
the industry.
(b) Concerns of this Transaction and Mitigation Factors
(1) All the pooled assets are normal loans disbursed by TGBAFC, and the
weighted average interest rate is 2.26%. If most of the assets with high interest
rate get prerpaid, the interest spread of the Asset Pool might decrease.
(2) Subject to the limit of its short establishment term, TGBAFC provided the
historical business data from August 2014 to March 2020, the statistics has
not experienced an entire lifetime, thus the prediction function of its business
historical performance for the Asset Pool’s performance in the future is limited.
(3) The Underlying Assets of this transaction are retail auto mortgage loans,
according to the transaction arrangement, the registration of change in
mortgage will not be filed when the Underlying Assets transferred to the trust.
Due to the failure to file registration of change in mortgages, there might be
adverse influence on the trust rights and benefits arising from that the
mortgage right held by the trust cannot be claimed against a bona fide third
party.
(c) Ratings and Considerations
CCXI gives the Class A1 Notes and Class A2 Notes under the Chang Ying 2020-
2 Retail Auto Mortgage Loan Asset-backed Securities ratings as follows, AAAsf for
Class A1 Notes; AAAsf for Class A2 Notes. The ratings given by CCXI for the Senior
Notes are mainly based on the considerations of this transaction with respect to the
following aspects:
(1) The majurity of the transaction structure and the pooled loans from the
legal dimension;
(2) The credit quality of the Asset Pool;
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(3) The credit enhancement provided by the senior/subordinated principal
payment mechanism;
(4) The characteristics of the transaction, including the cash flow distribution
priority, the adjustment to the cash flow distribution after the occurrence
of Event of Default, oppointment of the Back-up Servicer, the Liquidity
Reserve Account, etc.
(5) The credit situation of TGBAFC, and its capacity and experience for
serving as the Servicer.
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Chapter 7 Subsequent Arrangement of the Notes
1. Arrangement of Monitoring Ratings
A. Monitoring Rating Arrangement of CBR
China Bond Rating Co., Ltd. will conduct tracking surveillance on the credit status
of the rated Notes on a continuous basis within the valid period of the credit rating for
the rated Notes. For the outstanding asset securitization products issued before the end
of the previous year, of which the Senior Notes’ principal has not been paid off
completely, CBR shall issue a monitoring rating report before July 31st of the current
year.
CBR will continue monitoring the credit quality of the rated securities, and will try
its best to collect and digest related information that might impact the credit quality of
the Notes. Within the validity period of the Notes, the Originator shall promptly provide
CBR with relevant documents including but not limited to the Servicer Report, the
Trustee Report, annual financial report and related materials which may influence the
credit status of the Trust Property. If any material event that may influence the credit
of the Trust Property happens, the Trustee or the Originator shall notify and provide
relevant materials to CBR within three (3) Business Days of knowing the occurrence
of the material event. If CBR becomes aware of any material event that might impact
the ratings on the rated Notes, it will request the Originator, the Servicer, the Trustee,
the Principal Underwriters and the other transaction parties to provide relevant
materials to enable it to confirm whether it is necessary to adjust the credit rating on the
Notes. If CBR cannot obtain effective information, it may temporarily withdraw the
credit rating.
B. Monitoring Rating Arrangement of CCXI
According to the international practice and the requirement of the competent
authorities, CCXI will conduct tracking rating for the Senior Notes within the duration
of Chang Ying 2020-2 Retail Auto Mortgage Loan Asset-backed Securities.
CCXI will conduct tracking surveillance on the credit status of the Asset Pool,
evaluating the credit statur of the Originator, Servicer and Fund Custodian, and conduct
dynamic monitor on the credit situation of this transaction by examining the relevant
reports provided by the Servicer, Trustee and Fund Custodian on a regular basis, to
determine whether the risk level and the credit quality of the Notes change or not.
During the term of the Senior Notes, CCXI will issue monitoring rating report before
July 31 of each of the years since the next year proceeding the year of issuance. If any
change of the ratings for the Notes occurs, CCXI shall notify the Trustee timely and
disclose on its company website.
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2. Arrangement of Information Disclosure
A. Requirement and Approach of Information Disclosure
In the duration of the Notes, the information disclosure shall be conducted through
the Trustee Report disclosed by the Trustee, the monitoring rating reports disclosed by
the rating agencies according to the agreement, and the Trust liquidation report prepared
by the Trustee and other reports that the Trustee considers necessary disclosed by the
Trustee. The Noteholders becomes aware of the management, use, disposal and
payments of the Trust through the reports mentioned above.
B. Schedule, Channel and Contents of Information Disclosure
The Trustee shall disclose the relevant information to the Noteholders through
www.chinamoney.com.cn; www.chinabond.com.cn; www.cfae.cn disclosed by
template and directly linked to the information disclosure service system of the
NAFMII, and other manners acknowledged by the NAFMII. The Trustee shall ensure
the truthfulness, accuracy and completeness of the information disclosure and shall not
make any false statement, misleading representation or material omission.
The Settlor and the institutions entrusted by the Trustee to provide related services
shall provide the Trustee with relevant information reports in a timely manner and
guarantee such information provided to the Trustee is true, accurate and complete.
The Settlor, the Trustee and other insiders shall not reveal the information to be
disclosed before such disclosure.
On each Trustee Reporting Date, the Trustee shall provide the Trustee Report (in
the form attached in Schedule 9 of Trust Agreement) to the Inter-Bank Funding Center,
the Notes Custodian, the CFAE, and/or other disclosure platforms approved by the
NAFMII reflecting the conditions of the Trust Property corresponding to the Notes in
the current period and the information related to the payment of principal and interest
corresponding to each class of the Notes.
Before April 30 of each year, the Trustee shall publish the Trustee Report for the
preceding year audited by the Auditor. For the purpose of issuing the audit report, the
Auditor has the right to review and audit the relevant books and documents related to
the Trustee, the Servicer and the Fund Custodian and other materials related to the Trust.
The Trustee, the Servicer and the Fund Custodian shall cooperate with the Auditor.
The Trustee shall reach an agreement on the arrangement in relation to the
monitoring rating of the Senior Notes with the Rating Agencies, and disclose the
monitoring rating report of the preceding year to the Noteholders before July 31 of each
year within the term of the Senior Notes. The Trustee shall submit the Trustee Report
to the Rating Agencies on each Trustee Reporting Date. In the event of any Special
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Matter or any of the following temporary material event, the Trustee shall notify the
Rating Agencies within three (3) Business Days after it knows of or should have known
of such event.
If any temporary material event below having substantial effect on the value of the
Trust Property occurs, the Trustee shall, within three (3) Business Days after the Trustee
knows or should have known of the occurrence of such event, provide information
disclosure materials to the Inter-Bank Funding Center and the CCDC and report to the
PBOC and the CBIRC, the temporary material event referred to in this Section shall
include without limitation the following situations:
(1) The Trustee fails or is expected to fail to make payment of the current principal
and interest of the Senior Notes on time;
(2) occurrence of any Event of Default, Servicer Termination Event, Trustee
Termination Event, Accelerated Payment Event or item (a) through (d) of
Right Perfection Event;
(3) occurrence of any change of the Trustee, the Servicer or the Fund Custodian
and other agencies providing service for securitization;
(4) any breach of laws, regulations or agreements by the Trustee, the Servicer or
the Fund Custodian, which may have Material Adverse Effect on the Senior
Noteholders;
(5) any change of the credit rating of the Senior Notes;
(6) the Trustee, the Originator, the Servicer or the Fund Custodian or other
agencies providing services for the securitization have any material changes
of the business conditions, or has made decisions of capital reduction, merger,
spin off, dissolution, filing for bankruptcy, which may lower the level of
engagement in the securitization business of such parties and cause Material
Adverse Effect on the benefit of the Noteholders;
(7) other matters that shall be announced according to the regulations of the
NAFMII, the PBOC, the CBIRC and other regulatory authorities;
(8) other matters that shall be announced according to the Laws.
As for convening the Meeting of Noteholders, the convener(s) shall disclose the
time, location, the form of the meeting, matters to be considered, agenda, the voting
manner and other relevant information at least 30 days before the meeting, and disclose
the any resolutions generated from the meeting within ten (10) days after the meeting.
C. The Trust Announces the Offering of Notes
The Trustee shall publish the Offering Announcement, Offering Plan, Trust
Announcement, list of Syndicate Members, Offering Circular, credit rating reports,
monitoring rating arrangement and other offering documents five (5) working days
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before the issuance of the Notes. Trustee shall publish subscription documents one (1)
day before the issuance of the Notes.
The Trustee shall announce the issuance of the Notes on the day that issuance is
finished or one (1) day after that.
The Trustee shall report to the PBOC of the issuance of the Notes within ten (10)
days after the issuance is finished.
D. Ways for Further Access to Underlying Asset Pool Information
Noteholders who has evidence that is recognized by the Trustee to verify its
Noteholder status, can go to the main business premise of Trustee at the time (F6,
Middle Building, Chemsunny World Trade Center, 28 Fuxingmen Nei Street, Xicheng
District, Beijing at present) to access corresponding information of Underlying Asset
pool during normal business hours.
For further access, the address and contact details are as follows:
Issuer / Trustee: China Foreign Economy and Trade Trust Co., Ltd.
Registered Address: F6, Middle Building, Chemsunny World Trade Center, 28
Fuxingmen Nei Street, Xicheng District, Beijing
Contact: Hanyi LI (李汉艺), Wei CAO (曹魏), Hao WANG(王昊), Lingyue
KONG(孔伶月)
Tel: 010-59568841, 010-59568749, 010-57392586, 010-57392599
Fax: 010-59568906
Postal Code: 100031
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Chapter 8 Issuance, Underwriting, Registration, Custody,
Trading, Settlement and Treatment for Unsuccessful Issuance
1. Issuance of the Notes
After the execution of the Trust Agreement, the Trustee will file to the PBOC for
the issuance of the Senior Notes under the Trust Agreement to the investors of the
China’s Inter-bank Bond Market or other trading venues permitted by the regulatory
authorities according to the PRC Laws. The Senior Notes shall be issued by the Trustee
by means of Bookbuilding according to relevant regulations of PBOC. All the
Subordinated Notes shall be held by the Settlor in accordance with relevant regulations
of PBOC. The Trustee shall deliver all the Subordinated Notes to the Settlor. The Settlor
agrees to proactively assist the Trustee’s issuance of the Senior Notes.
2. Underwriting of the Notes
The Trustee, acting as the Issuer of the Notes, shall enter into the Underwriting
Agreement with the Originator and the Principal Underwriters, and the Principal
Underwriters shall enter into the Underwriting Syndicate Agreement with other
Underwriters for the underwriting of the Senior Notes by the Principal Underwriters
and other Underwriters. Rights and obligations of the parties shall be stipulated in the
Underwriting Agreement entered by and between the Trustee, the Settlor, and the
Principal Underwriters. The Principal Undrwriters shall transfer the Subscription
Amount after deducting the Underwriting Fees to the issuer’s proceeds account
designated by the Trustee on time according to the Underwriting Agreement.
3. Registration and Custody of the Notes
During the Trust Duration, the Notes shall be registered with and kept in the
custody of the Notes Custodian. On the condition that the Subscription Amount
(deducting the Underwriting Fees) stipulated in the Underwriting Agreement having
remitted into the issuer’s proceeds account designated by the Trustee on the Trust
Property Delivery Date, the Trustee shall, in accordance with the rules and procedures
of CCDC, send the Confirmation Letter on Receipt of the Issuance Proceeds of the
Notes and other relevant documents to the CCDC, and CCDC will conduct the
confirmation of the Notes custody accordingly and send the Confirmation Letter on
Completing the Registration for Custody to the Trustee. The issuance register service
fees of the Notes shall be deducted and withdrew by the Trustee from the issuance
proceeds and paid to CCDC within five (5) Business Days after the completion of the
registration for custody. In compliance with the Trust Agreement, the Trustee shall enter
into Registration and Custody Agreement with the Notes Custodian and Paying Agent
regarding specific issues in the registration and custody of the Notes.
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4. Trading of the Notes
After the completion of the issuance of the Notes on the China’s Inter-bank Bond
Market and the registration of the Notes with the Notes Custodian, the Noteholders
could trade the Notes on the China’s Inter-bank Bond Market and other trading venues
permitted by the regulatory authorities according to the applicable PRC Laws.
The period during which the Settlor holds the Subordinated Notes shall not be
shorter than the duration of the Subordinated Notes. Unless otherwise stipulated by
PRC Laws, the Subordinated Notes held by the Settlor shall not be transferred.
The Noteholders are entitled to the Trust Beneficial Right corresponding to the
class and amount of the Notes held by such Noteholders. The Notes are evidence of the
Trust Beneficial Rights and the corresponding obligations of the holders of such Notes.
5. Settlement of the Notes
The Notes shall be settled with accordance to the Operational Rules on the
Issuance, Registration and Settlement of the Asset-backed Securities.
The Noteholders could transfer, offset debt with, or otherwise transfer the Notes
in any means permitted by the Laws, and perform the corresponding registration of
change pursuant to relevant rules.
6. Form and Means for the Beneficiary Acquiring the Trust Benefit
On the Business Day immediately before the Payment Date, the Noteholders
registered with the Notes Custodian on the list of Noteholders shall be the Noteholders
entitled to the principal and interest of such period, and have the right to acquire the
principal and interest of the Notes during such period on such Payment Date.
The Trustee shall safely keep the Confirmation Letter on the Completion of Notes
Principal and Interest Payment (if any) issued by the Paying Agent to the Trustee.
The Noteholder shall inform the Trustee and the Notes Custodian of any change
in its registered information at the Notes Custodian, and the Trustee and the Notes
Custodian shall change the corresponding registration information after conducting a
review. The Trustee and the Notes Custodian shall be free and clear of any risk, which
in turn shall be borne by such Noteholder, as a result of the Noteholder’s failure to
timely inform the Trustee and/or the Notes Custodian.
7. Treatment for Unsuccessful Issuance of the Notes
If the Senior Notes are not fully subscribed by the end of the Bookbuilding Date,
or the subscription amount of the Senior Notes is not fully paid as of the Subscription
Date, and any of the Principal Underwriters fails to fulfill its standby commitment
underwriting responsibilities in accordance with the Underwriting Agreement, the
issuance of the Notes shall be deemed to be unsuccessful. In such case, unless otherwise
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provided in the Trust Agreement or other Transaction Documents, the Settlor and the
Trustee shall each bear its own costs and expenses incurred for the issuance of the Notes.
Upon an unsuccessful issuance of the Notes, the Trustee shall, on no later than the
Business Day immediately following the conclusion of such unsuccessful issuance,
provide an Announcement on Issuance Results to the Notes Custodian, upon which the
Notes Custodian will perform the de-registration procedure for the Notes accordingly.
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Chapter 9 Accounting and Management of Trust Property
1. Accounting of Trust Property
The Trustee shall keep the book and conduct accounting for the Trust Property
according to the Trust Law, Accounting Standards for Business Enterprises and the
Interpretation of the Accounting Standards for Business Enterprises published by the
Ministry of Finance and other PRC Laws.
The Trustee shall set up the Trust Account especially for the settlement of funds
under the Trust, to maintain settlement management procedures, and to ensure the
management and calculation of the Trust Property under the Trust to be separated from
those of the Trustee’s own property and properties under other trusts.
The Trustee shall establish independent accounting record and financial reports for
the Trust to ensure the independence of the Trust Property.
The Trust will exist as an independent entity for accounting purposes, under the
premise of continuous operation, independent bookkeeping, independent accounting,
and independent compilement of the financial accounting report, and independent
accounting for the management, usage and disposition of the Trust Property. The
Trustee, the Servicer and the Fund Custodian shall perform the accounting treatment of
the entire process of the trust in a separate and cooperative manner; the Trustee shall
conduct the accounting calculation and compile the accounting financial reports based
on the information, including the Monthly Servicer Report, the Servicer’s accounting
information, the Fund Custodian Report and other information provided by the Servicer
and the Fund Custodian respectively.
2. Management of the Asset Pool
The Trustee shall entrust TGBAFC as the Servicer to provide Services in relation
to the Asset Pool. The specific matters concerning the Asset Pool management shall be
stipulated in the Servicing Agreement separately executed by and between the Trustee
and the Servicer. Upon the occurrence of any Servicer Termination Event, the Servicer
shall be replaced. The procedures of Servicer replacement shall be specified in the
Servicing Agreement by the Trustee and the Servicer.
3. Custody of the Monetary Trust Property
The Trustee shall set up the Trust Account at the Fund Custodian, and entrust the
Fund Custodian to take custody of the funds in such account. The Trustee and the Fund
Custodian shall separately execute the Fund Custody Agreement concerning the fund
custody related matters; Upon the occurrence of any Fund Custodian Termination Event,
the Fund Custodian shall be replaced. The procedures of Fund Custodian replacement
shall be specified in the Fund Custody Agreement by the Trustee and the Fund
Custodian.
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4. Termination and Liquidation of the Trust
A. Termination of the Trust
The Trust terminates as of the occurrence of the following events (the
corresponding date is the Trust Termination Date):
(1) the purpose of the Trust cannot be realized;
(2) the Trust is revoked or is determined to be invalid or is ordered to be terminated
by the court or arbitration institutions according to the Laws;
(3) CBIRC or the relevant regulatory authorities order to terminate the Trust under
the Laws;
(4) the Meeting of Noteholders decides to terminate the Trust in advance;
(5) the Trust Property is fully liquidated (including by Clean-Up Call);
(6) the Final Maturity Date arrives.
B. Liquidation of the Trust
The Trustee shall complete the liquidation of the Trust within sixty (60) days after
the Trust Termination Date (or some later date approved by the Meeting of Noteholders):
(1) liquidate the Permitted Investment; (2) liquidate the Trust Property other than cash,
deposit, and the Permitted Investment (the “Non-cash Trust Property”) pursuant to
Section 10.3.3 of the Trust Agreement.
The Trustee shall prepare a liquidation plan for the Non-cash Trust Property (the
“Liquidation Plan”) within ten (10) days after the Trust Termination Date, and convene
the Meeting of Noteholders within thirty (30) days after the Trust Termination Date
pursuant to Section 19 of the Trust Agreement for the Meeting of Noteholders to decide
whether to ratify the Liquidation Plan. Before the Meeting of Noteholders has reached
a resolution on the Liquidation Plan of the Trust Property, the Trustee shall continue
managing, disposing, and using the Trust Property with accordance to the Trust
Agreement and the Transaction Documents.
In the case where the Meeting of Noteholders has formed an effective resolution
regarding the Liquidation Plan, the Trustee shall liquidate the Non-cash Trust Property
with accordance to the Liquidation Plan ratified by the Meeting of Noteholders; in the
case where the Meeting of Noteholders fails to form an effective resolution regarding
the Liquidation Plan, the Trustee shall have the right to liquidate the Non-cash Trust
Property in accordance with PRC Laws by public auction, sale, and other means, unless
otherwise provided by the Meeting of Noteholders, all Noteholders and the Settlor shall
accept the means and results of such liquidation by the Trustee.
The Trustee shall prepare a trust liquidation report according to relevant law within
thirty (30) days after the completion of the liquidation of the Trust Property and shall
cause it to be audited by the Auditor. Within five (5) Business Days after the Auditor
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issues the audit report in terms of the trust liquidation report, the Trustee shall disclose
the audited trust liquidation report pursuant to Section 21 of the Trust Agreement, for
which the announcement period shall be thirty (30) days.
If by the expiration of the announcement period, no written objection has been
raised by the Noteholders who held the unpaid Notes on the Trust Termination Date,
the Trustee will be released from liabilities arising from items listed in the trust
liquidation report, except for any liabilities arising from the misconduct, negligence,
fraud, or default of the Trustee.
After the termination of the Trust, the Trust Property shall be allocated according
to the Section 9.7 of the Trust Agreement.
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Chapter 10 Important Documents and Conditions for the
Transfer of Trust Property
The entrustment of the Asset Pool by the Settlor to the Trustee on the Trust
Effective Date, the acceptance of the Asset Pool and creation of the Trust by the Trustee
on the Trust Effective Date shall be conditioned on the satisfaction (or waiver by the
party with right) of the following preconditions on or before the Trust Effective Date:
(1) the Settlor has delivered to the Trustee copies of the Settlor’s financial license,
business license, and board resolution and/or other necessary corporate
documents, approval, or authorization documents approving the Settlor’s
execution of the Transaction Documents and its engagement in the transactions
under the Trust Agreement;
(2) the Settlor has delivered to the Trustee the complete List of Underlying Asset;
(3) the Trustee has delivered to the Settlor copies of the Trustee’s financial license,
business license, and necessary corporate documents, approval, or
authorization documents approving the Trustee’s execution of the Transaction
Documents and its engagement in the transactions under the Trust Agreement;
(4) the Servicer, Fund Custodian and Principal Underwriter have delivered to the
Trustee respectively all necessary internal documents (including but not
limited to the corporate documents, approval, or authorization letter), approval
and authorization by the Government Authorities and third party to execute the
Transaction Documents, to exercise its rights, and to perform its obligations
thereunder;
(5) each party to the Definition Schedule, the Trust Agreement, the Servicing
Agreement, the Fund Custody Agreement, and the Underwriting Agreement
has delivered the original Transaction Documents duly executed by such party
to the Trustee and relevant counterparties;
(6) the Settlor has obtained the qualification approval documents issued by
CBIRC on the credit asset securitization business;
(7) the Settlor and the Trustee have completed the registration for this credit asset
securitization project with CBIRC;
(8) the Trustee has completed the registration with PBOC on the Trustee’s
issuance of the Notes contemplated herein;
(9) the Notes are issued successfully;
(10) the Accounting Consultant, Tax Consultant has issued opinions on the
accounting treatment and on tax issues in respect of the entrustment of Asset
Pool to the Trustee;
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(11) the Legal Counsel has issued legal opinion on issues regarding, among other
things, the legality and validity of the Transaction Documents and the legality
of the creation of the Trust;
(12) the Settlor and the Trustee have completed the delivery of Trust Property
according to Section 3.7 of the Trust Agreement.
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Chapter 11 Influence of PRC Laws
The following is an introduction to certain influences that the PRC Laws may have
on the Noteholders. This introduction does not exhaust all the legal issues. A Noteholder
shall consider the characteristics of such Notes, the political and legal environment of
PRC, and further investigations it deems appropriate according to its own judgment.
1. Legal and Regulatory Framework of Credit Asset Securitization
In the PRC, credit asset securitization is such structured finance activities where
banking financial institutions and other financial institutions approved by the CBIRC
and PBOC as the originator, entrust the credit assets to a trustee, and the trustee issues
to the investment institutions beneficial securities in the form of asset-backed securities
whose returns are paid with the cash generated by such credit assets. The major
regulators of credit asset securitization are the CBIRC and the PBOC. According to the
Laws, the CBIRC supervises and regulates the credit asset securitization activities of
the relevant institutions, and the PBOC supervises and administrates the issuing and
trading activities of the asset-backed securities in the China’s Inter-Bank Bond Market.
Credit asset securitization carried out by TGBAFC shall comply with Trust Law of
the People’s Republic of China (“Trust Law”), the Administrative Measure for the Pilot
Securitization of Credit Assets, Measures for Supervising and Administrating the Pilot
Securitization of Credit Assets by Financial Institutions, Provisions on the Asset-backed
Securities Information Disclosure, Notice on the Further Expansion of Credit Asset
Securitization Pilot Program, Notice on the Workflow Process of the Registration of the
Credit Asset Securitization, PBOC Notice [2015] No.7, PBOC Notice [2015] No.9 and
other relevant laws, regulations, departmental rules, and regulatory documents. Trust
companies, acting as Trustee of the credit asset securitization shall also comply with
the Measures for the Administration of Trust Companies, and other industrial laws and
rules. Additionally, the personal automobile mortgage loan business, the related lending
and security, and other civil law issues involved in the securitization carried out by
TGBAFC shall comply with the Measures for the Administration of Automobile
Finance Companies, Administrative Measures for Automobile Loans, and other
financial laws and regulations, as well as the General Principles of the Civil Law of the
People's Republic of China, General Provisions of the Civil Law of the People's
Republic of China, the Contract Law of the People’s Republic of China (“Contract
Law”), Guaranty Law of the People’s Republic of China (“Guaranty Law”),
Interpretations of Several Issues in the Application of the Guaranty Law by the Supreme
People’s Court (“Guaranty Law Interpretation”), Civil Procedure Law of the People’s
Republic of China (“Civil Procedure Law”), Enterprise Bankruptcy Law of the People’s
Republic of China (“Enterprise Bankruptcy Law”), Property Law of the People’s
Republic of China (“Property Law”), and other civil and commercial laws and
regulations.
2. Special Purpose Trust
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The trust under the Trust Law refers to act where the settlor, based on its faith in
the trustee, entrusts its property rights to the trustee and allows the trustee to, according
to the will of the settlor and in the name of the trustee, administer or dispose of such
property in the interest of a beneficiary or for any specific purpose. Credit asset
securitization employs the principle of the independence of the trust property by
allowing the duly created special purpose trust for the securitization to be the special
purpose vehicle to fulfill the requirement of bankruptcy remoteness in the credit asset
securitization.
(1) Creation of the Special Purpose Trust
According to the Trust Law, for the creation of a trust there must be a lawful trust
purpose, and the trust property must be definite properties and/or property rights validly
owned by the settlor; and the the scope of the beneficiary must be ascertainable. A trust
is invalid if the trust purpose is in violation of the laws, administrative regulations, or
public interest, if the trust is created only for the purposes of litigation or debt collection,
if the trust is created with illegal properties or properties unsuitable for the creation of
a trust according to the Trust Law, or if the trust property is unascertainable.
In order to create a special purpose trust, the Originator must entrust the credit
asset to the trustee of the special purpose trust. For TGBAFC to create a trust with credit
assets as trust property, the corresponding transfer procedures are required as in the
transfer of the loan and the security rights and interest (details of which are included in
the Transfer of Creditor’s Rights in Personal Automobile Mortgage Loan and the
Underlying Security Rights and Interests). Additionally, the Administrative Measure for
the Pilot Securitization of Credit Assets requires the originator in a credit asset
securitization to put an announcement on national media informing the relevant
obligees of the transfer of credit assets through creation of special purpose trust.
According to the Administrative Measure for the Pilot Securitization of Credit
Assets, Measures for Supervising and Administrating the Pilot Securitization of Credit
Assets by Financial Institutions, and PBOC Notice [2015] No.7, the originator and
trustee in a credit asset securitization pilot program could apply for registration with
the PBOC for the transfer of credit asset through creation of special purpose trusts, and
issuance of asset-backed securities in the China’s Inter-Bank Bond Market, provided
that it shall submit to the PBOC all the documents and/or reports as required in the
aforementioned regulations and supplements and amendments therein from time to time,
and complete the filing procedures with the CBIRC pursuant to the relevant laws and
regulations.
(2) Independence of Trust Property
Pursuant to the Trust Law, the Administrative Measure for the Pilot Securitization
of Credit Assets, and the Measures for Supervising and Administrating the Pilot
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Securitization of Credit Assets by Financial Institution, after the creation of a special
purpose trust, the trust property becomes independent from the proprietary assets of the
originator, the trustee, the servicer, the fund custodian, the notes custodian, and other
service providers in the securitization. If the aforementioned entities are liquidated
because of the dissolution, invalidation or declaration of bankruptcy of such entities
under the law, unless at such time any of the aforementioned entities is the only
beneficiary of the trust, the trust property shall not be a part of the liquidation estate of
any of such entities. None of the originator, trustee, servicer, fund custodian, notes
custodian or other service providers to the securitization shall exercise offset right
against the trust property, so as to clear the debt owed by a noteholder to such entity
itself. Nor shall the trustee offset the debts arising out of the management and
disposition of trust properties of different trusts against each other. Except for the
priority right, offset right, and defenses acquired by the creditors before the creation of
the trust in or against the trust property, debts of the trustee arising from managing the
trust affairs relating to the trust property, taxes borne with the trust property, and other
causes stipulated by law, no judicial enforcement shall be brought against the trust
property.
3. Transfer of Creditor’s Rights in Personal Automobile Mortgage Loan and the
Underlying Security Rights and Interests
(1) Transfer of Creditor’s Rights in Personal Automobile Mortgage Loan
(i) Transfer of Creditor’s Rights
Pursuant to the Contract Law, TGBAFC, as the original creditor, does not need to
acquire special approval or registration to transfer the personal automobile mortgage
loan creditor’s rights, and such transfer becomes effective between the original creditor
and the transferee as of the time when such transfer agreement becomes effective.
TGBAFC does not need to acquire the consent from the obligor either, but should
provide notice to the obligor. If such notice is not provided to the obligor, the transfer
of personal automobile mortgage loans creditor’s rights shall not be binding on the
obligor, and the obligor may continue to perform to the original creditor, whereas the
transferee cannot require the obligor to perform.
With regards to the matter of effectiveness of creditor’s rights transfer notice on
the obligor, the PRC law adopts the doctrine of receipt: except for the transfer of
creditor’s rights under non-performance loans by the state-owned commercial banks to
the financial asset management companies, if the transferring financial institution
provides notice to each of the obligor regarding the transfer, such transfer shall be
effective to the obligor.
Additionally, pursuant to the Administrative Measure for the Pilot Securitization
of Credit Assets, the originator in a securitization shall announce on national media and
inform the relevant obligees of the transfer of credit assets through creation of special
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purpose trust.
(ii) Offset Right and Defense of the Obligor
In the case where TGBAFC transfers its creditor’s rights in personal automobile
mortgage loans, the rights of the transferee could be affected by the offset rights and
defense the obligor has against the original creditor. Pursuant to the Contract Law, at
the time when an obligor receives a notice on the transfer of creditor’s rights from the
original creditor, and if the obligor is owed a debt by the original creditor and such debt
is due prior to or at the same time with the transferred debt, the obligor could claim
offset right against the transferee. On the other hand, after the obligor’s receipt of the
notice on the transfer of creditor’s rights, existing defense of the obligor against the
original creditor could be claimed against the transferee.
(2) Transfer of Mortgage Rights Attached to the Personal Automobile Mortgage
Loans
Pursuant to the Guaranty Law, a mortgage right cannot be separated and
transferred independently from the debt it secures or become security for other debts.
Pursuant to the Property Law, a mortgage right cannot be separated and be transferred
independently from the debt it secures or become security for other debts; if the debt is
transferred, the mortgage right securing such debt shall be transferred together, except
for otherwise provided by the laws or otherwise agreed by the parties. Additionally, the
Contract Law provides that if a creditor transfers its right, the transferee acquires the
accessory rights of such right, unless such accessory rights are exclusively owned by
the creditor. The mortgage right attached to the mortgage vehicles securing such loan
shall be transferred along with the rights in the personal automobile mortgage loan
which is transferred by TGBAFC.
The Guaranty Law provided that registration is required for the grant of mortgage
in automobiles, and the mortgage agreement shall be effective as of the registration date,
with the corresponding automobile registration authority as the mortgage registration
authority. However, pursuant to the Property Law, as for the grant of mortgage in
automobiles, the mortgage right shall become effective upon the coming into force of
the mortgage agreement; however, such mortgage right cannot be enforced against a
bona fide third party without registration. Pursuant to the Property Law, if discrepancies
exist between the Property Law and the Guaranty Law, the provisions of the Property
Law shall prevail.
(3) Transfer of Guaranty Attached to the Personal Automobile Mortgage Loans
Pursuant to the Guaranty Law, during the guaranty period, if TGBAFC lawfully
transfers the debt to a third party, the attached guaranty shall be transferred together,
without other special procedures required, and the guarantor shall be responsible for
such guaranty, within the limit of the original guaranty, to the transferee. Provided that,
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if the guarantor and the original creditor agreed beforehand that the guaranty is for the
original creditor exclusively, or that the debt cannot be transferred, such guarantor shall
not be responsible for the guaranty after such transfer.
Pursuant to the Guaranty Law, the guarantor is entitled to the right to defense that
can be claimed by the debtors. The right to defense waived by debtor could be claimed
by the guarantor.
4. Realization of Mortgage Rights
(1) General Rules
If the personal automobile mortgage loan becomes due and the obligor fails to pay
the debt, TGBAFC could make recoveries by the realization of mortgage rights. For
TGBAFC to realize the mortgage rights, it may negotiate with the mortgagor to offset
the debt with the collateral, or auction or sell the collateral, or proceed with judicial
enforcement. The Property Law provides that if the mortgage right is realized by means
of agreement and such agreement causes damage to the interest of other creditors, such
aggrieved creditor could file a suit in the people’s court to rescind such agreement
within 1 year of knowledge or should have knowledge of the causes for such rescission.
(2) General Procedures for Judicial Enforcement
If the personal automobile mortgage loan is due and the obligor fails to repay the
loan, TGBAFC may sue at the people’s court. Pursuant to the Civil Procedure Law, a
people's court shall, in handling a case to which ordinary procedure is applied, close
such case within 6 months from accepting the case; where an extension of the term is
necessary for special circumstances, a 6-month extension may be given subject to the
approval of the president of the said court. Any further extension shall be reported to
the people's court at a higher level for approval. When trying simple civil cases in which
the facts are evident, relationship of rights and obligations is definite, and disputes are
minor, the people's courts may apply the summary procedure, and shall complete the
trail and close such case within 3 months from acceptation of such case. After the trial
court has made a judgment, and the parties did not appeal, such judgment shall be
effective; if the party(s) appeals to the people’s court of a higher level within 15 days
from the service of the written judgment, the case shall be concluded within 3 months
of acceptation of such appellate case; where an extension of the term is necessary for
special circumstances, an approval of the president of the said court is required. A
judgment by the appellate court is the final judgment.
If the obligor refuses to enforce the legally effective civil judgment, TGBAFC
could file to the trial court for compulsory enforcement within 2 years from the last day
of the performance period stipulated in the judgment. The people’s court has the
authority to seize, impound, freeze, auction, or sell the mortgage vehicle of such obligor.
After the seizure and the impoundment, if the obligor fails to perform the obligations
stipulated in the legal documents, the people’s court could auction or sell the seized or
impounded property. Unless otherwise provided in the laws and judicial interpretations,
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the people’s court shall first enforce by auction.
(3) Auction Procedures
(i) General Auction Procedures
TGBAFC could enter into an agreement with the mortgagor to realize the
mortgage rights by auction of the collateral. According to the Auction Law of the
People’s Republic of China, generally an auction procedure includes the auction
consignation, auction announcement, and the auction; the object(s) of the auction shall
be the goods or property rights which are owned by the consignor or which the
consignor may lawfully dispose of. The consignor shall consign an auction house with
the appropriate qualifications for the auction. The auction house shall publish an auction
announcement on newspaper or other media 7 days before the auction date. The
consignor has the right to set a reserve price. If the highest bid by the bidders does not
reach the reserve price, such bid does not take effect; the auctioneer shall cease the
auction of the mortgage vehicle. When the highest bid by the bidders is confirmed by
the auctioneer by hammering or any other way of public confirmation, the auction
transaction is concluded. After a transaction is concluded, the vendee and the auction
house shall execute a written confirmation. The vendee shall pay the price for the
object(s) of the auction, and the consignor and vendee shall go through the transfer
registration with the relevant administrative authorities by providing the transaction
certificate prepared by the auction house and other relevant materials.
The consignor and vendee may reach an agreement with the auction house on the
proportion of commission. Where a transaction is concluded in the absence of such an
agreement, the auction house may charge a commission of no more than 5% of the
transaction price from the consignor and the vendee respectively. Where no transaction
is concluded, the auction house may charge the consignor the expenses as agreed. In
the absence of such an agreement, the auction house may charge the consignor a
reasonable amount for the expenses of auction.
(ii) Auction Procedure during Civil Law Enforcement by the People’s Court
According to the Regulations of the Supreme People's Court on the Auction and
Sale of Property during Enforcement in Civil Cases by the People’s Court, for a people’s
court to auction the mortgage vehicles for the enforcement of the legally effective civil
judgments, the court shall consign an auction house with the appropriate qualifications,
and shall supervise the auction by such auction house. The court shall engage an
appraiser with the appropriate qualifications to appraise the mortgage vehicles to be
auctioned. The creditor and the mortgagor could move to waive the appraisal. The court
shall determine the reserve price according to the appraisal price; if the mortgage
vehicles have not been appraised, the court shall refer to the market value and solicit
the opinions of the parties. For the first auction, the reserve price determined by the
people’s court shall in no case be lower than 80% of the appraisal price or the market
price; if there previously has been an abortive auction, the reserve price could be
lowered at the discretion of the court during the new auction, provided that each
decrease shall in no case be greater than 20% of the immediately preceding reserve
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price.
To auction the mortgage vehicle, the auction house should publish an auction
announcement on the media and within scope agreed by the parties in such case or
determined by the people’s court on no later than 15 days before such auction. The
people’s court shall provide notice in writing, or in any other way whose receipt could
be confirmed, on no later than 5 days before such auction, to the applicant creditor(s)
for the enforcement, the mortgagor, known security interest creditors, right of first
refusal holders, or any other priority rights holder to appear on the auction day. If no
one submits a bid during the auction, or the highest bid is below the reserve price, and
the applicant creditor(s) or other enforcing creditors present at the auction submits or
agrees to accept the mortgage vehicle to be auctioned at the reserve price, such vehicle
shall be transferred to such creditors and be applied towards the debt. When a
transaction is concluded at the auction, or when the mortgage vehicle to be auctioned
is used to offset the debt when no transaction is concluded, the people’s court shall
make a ruling stipulating that the title to such vehicle shall be transferred as of the
conclusion of the auction transaction, or as of the service of such ruling to the vendee
or the receiver. The vendee shall pay the price to the people’s court, or transfer the price
to an account designated by the people’s court, within the period stipulated in the
auction announcement or determined by the people’s court.
If no one submits a bid during the auction, or the highest bid is below the reserve
price, and the applicant creditor(s) or other enforcing creditors present at the auction
does not submit to offset the debt with such vehicle at the reserve price, such vehicle
shall be auctioned again within 60 days. For real property or other assets that are
auctioned for the second time and no transaction is concluded, the people’s court could,
pursuant to the laws, have such property or property rights appraised and deliver and
apply them to the debts of the applicant creditor(s) or other enforcing creditors. If the
applicant creditor(s) or other enforcing creditors refuse to accept, or if such property or
property rights cannot be delivered, a third auction should be conducted within 60 days.
If no transaction is concluded at the third auction, and the applicant creditor(s) or other
enforcement creditors refuse to accept or cannot legally accept the mortgage vehicle to
be auctioned at the reserve price, the people’s court shall publish a sale announcement
within 7 days from the conclusion of the third auction. If no buyer is willing to buy such
mortgage vehicle at the reserve price of the third auction within 60 days from the
publication of the sale announcement, and the applicant creditor(s) or other
enforcement creditors still refuse to accept the vehicle and apply towards the debts,
unless if other enforcement measures could be brought against such mortgage vehicle,
the seizure of freeze of such vehicle shall be removed and such vehicle shall be returned
to the mortgagor.
If a transaction is concluded at the auction, the auction house is entitled to
commissions on a pro rate basis. If the auction house is determined through an open
bidding, the amount of commission shall be the amount stipulated in the winning bid.
If no transaction was concluded at the auction, or the auction consignment was
withdrawn for reasons not attributable to the auction house, the person to be enforced
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shall bear the reasonable expenses incurred for such auction by the auction house.
(4) Application Priorities of Auction Proceeds
Pursuant to the Property Law, Guaranty Law, and Guaranty Law Interpretation,
the proceeds from the compromise, auction or sale of the collateral shall firstly be
applied to the debt owed to the mortgagees. If there are more than 2 mortgagees on the
same mortgage vehicle, the proceeds from the auction or sale shall be applied in the
following order of priority: 1. if the mortgage rights have been registered, apply
according to the sequential order of registration; if the mortgage rights are of the same
sequential order, apply on a pro rata basis; 2. a registered mortgage right has priority
over a conflicting mortgage right that is not registered; 3. if none of the mortgage rights
is registered, apply on a pro rata basis.
If the price at which the mortgage vehicle is compromised, auctioned, or sold is
lower than the price at the time when the mortgage right was granted, the debt shall be
paid according to the actually realized value of the collateral. The deficiency shall be
paid by the obligor. In the case where the price at which the mortgage vehicle is
compromised, auctioned, or sold exceeds the amount of the debt, such excess shall
belong to the mortgagee.
The order of priority for the application of the agreed price of the collateral or the
proceeds of the auction or sale of the collateral could be stipulated by the mortgagee
and the mortgagor in an agreement; if there is no such agreement, the proceeds shall be
applied in the following order of priority: 1. the expenses for realizing the mortgage
right; 2. interest on the principal; 3. the principal.
5. Influence of the Bankruptcy Law on the Realization of Mortgage Right
According to the current bankruptcy legal system (detailed in the Bankruptcy Law
part below), all the assets belonging to the debtor at the time of accepting the filing of
bankruptcy petition, and the assets acquired during the period from accepting the filing
of bankruptcy petition to the termination of bankruptcy proceeding shall be the assets
of the debtor. Creditors having security interest in certain properties of the bankrupt
person shall have priority in such certain properties and the proceeds thereof. The
unpaid part of a debt after the creditor has exercised the priority rights shall participate
in the distribution as an unsecured debt.
(1) Bankruptcy Law
Currently the PRC legal regimes governing the bankruptcy of enterprise legal
persons mainly include: 1. the Enterprise Bankruptcy Law; 2. Stipulations of the
Supreme People's Court on Several Issues concerning the Trial of Enterprise
Bankruptcy Cases (No. 273 [2002] of the Supreme People's Court); 3. Stipulations of
the Supreme People's Court on Several Issues concerning the Application of the
People's Republic of China Enterprise Bankruptcy Law (I) (No. 22 [2011] of the
Supreme People's Court); 4. Stipulations of the Supreme People's Court on Several
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Issues concerning the Application of the People's Republic of China Enterprise
Bankruptcy Law (II) (No. 22 [2013] of the Supreme People's Court); and 5. Stipulations
of the Supreme People's Court on Several Issues concerning the Application of the
People's Republic of China Enterprise Bankruptcy Law (III) (No. 3 [2019] of the
Supreme People's Court), etc. Additionally, for a financial institution to bankrupt, the
State Council could formulate implemental measures pursuant to the Enterprise
Bankruptcy Law and other relevant laws.
All the assets belonging to the debtor at the time of accepting the bankruptcy
petition, and the assets acquired during the period from accepting the filing of
bankruptcy petition to the termination of bankruptcy proceeding shall be assets of the
debtor; after the debtor has been declared bankrupt, the debtor shall be referred to as
the bankrupt person, and the debtor’s assets shall become the bankrupt estate. An
administrator shall have the right to request the people’s court to nullify any of the
following actions taken within 1 year before the people's court accepts the bankruptcy
petition in respect of the debtor's property:(1) transferring the property gratis;(2) trading
at an obviously unreasonable price;(3) providing property guaranty to debts not secured
by properties;(4) prepayment of undue debts; or (5) abandoning claims. Within 6
months before the people's court accepts the bankruptcy petition, if a debtor is unable
to pay off its due debts and its assets are not enough for paying off all the debts, or such
debtor apparently lacks the ability to pay off its debts but chooses to make repayments
to individual creditors, the administrator shall have the right to request the people's
court to nullify such repayments, except where such individual repayments are
beneficial to the debtor's property. The following actions taken in respect of the debtor's
property are invalid: (1) concealing or transferring property for the avoidance of the
debts; and (2) fabricating debts or acknowledging unreal debts. An administrator shall
formulate a realization plan for the bankruptcy estate and submit it to the creditors'
meeting for discussion. The bankruptcy estate shall be realized through auction, unless
otherwise resolved by the creditors' meeting. A bankrupt enterprise may be sold and
realized in whole or in parts. When an enterprise is being sold and realized, the
intangible assets and other property may be sold and realized separately. With respect
to the property which shall not be auctioned or the transfer of which is restricted
according to relevant State regulations, it shall be disposed of in a manner as prescribed
by the State.
The bankruptcy estate shall, after the expenses for bankruptcy proceedings and the
debts incurred for the common good of creditors are repaid, be liquidated and applied
in the following order of priority:(1) the wages, subsidies for medical treatment, injuries
and disability and the allowances for the disabled and the families of the deceased
which the bankrupt person owes, the basic pension premiums and the basic medical
insurance premiums which the bankrupt person owes and fails to enter into the
employees' personal accounts, and the compensations payable to the employees as
prescribed by relevant laws and administrative regulations;(2) the social insurance
premiums and the taxes which the bankrupt person fails to pay, other than those
specified above; and(3) the ordinary bankruptcy claims. If the bankruptcy estate is not
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sufficient to satisfy the demands for repayment which are of the same order of priority,
the bankruptcy estate shall be distributed on a pro rata basis.
In the case where a commercial bank, a securities company, an insurance company
or any other financial institution is unable to pay off its due debts and its assets are not
sufficient to pay off all its debts, or apparently lacks the ability to pay off its debts, the
financial regulatory authority under the State Council may file a petition to the people’s
court to reorganize or liquidate such a financial institution. In the case where the
financial regulatory authority under the State Council adopts, according to law, such
measures as take-over and trusteeship with respect to a financial institution that operates
at grave risks, it may apply with the people's court for suspending the proceedings for
civil action wherein the said financial institution is the defendant or the enforcement
procedures against whom a judgment or ruling is being enforced.
6. Influence of the Property Law on the Realization of Mortgage Right
The Property Law came to effect on October 1, 2007. The Property Law, on the
one hand, absorbed and consolidated accordingly parts of the Guaranty Law and
Guaranty Law Interpretation; on the other hand, it supplemented and amended the
Guaranty Law and Guaranty Law Interpretation. According the Property Law, in the
case where a stipulation in the Guaranty Law is inconsistent with the Property Law, the
Property Law shall prevail.
With regards to the automobile mortgage registration, pursuant to the Guaranty
Law, mortgage granted in an automobile shall be registered, and the mortgage
agreement shall become effective as of the day of such registration, the appropriate
authority for mortgage collateral registration shall be the registration authority for such
automobile. However, the Property Law stipulates that mortgage granted in an
automobile shall become effective as of the time when the mortgage contract becomes
effective; an unregistered mortgage cannot be enforced against a bona fide third person.
Therefore, if a transfer of mortgage right occurred after the effectuation of the Property
Law, the stipulations in the Property Law shall apply.
With regards to the transfer of a debt and the mortgage rights attached, the Property
Law makes it clear that, the mortgage rights cannot be separated from the debt it secures
and transferred independently, or become security to other debts. In the case where a
debt is transferred, the mortgage right securing such debt shall be transferred along with,
unless otherwise provided by law or otherwise agreed by the parties. With regards to
the realization of mortgage rights, in the case where the obligor does not perform the
debts due, or an event agreed by the parties upon which the mortgage shall be realized
occurs, the mortgagee could negotiate with the mortgagor to offset the debt with the
collateral, or apply the auction or sale proceeds of such collateral towards the debt with
priority. If such agreement impairs the interest of other creditors, such creditors could
file suit in a people’s court for rescinding such agreement within 1 year from the date
when such creditors know or should have known the causes for such rescission. In the
absence of an agreement between the mortgagee and the mortgagor regarding the means
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to realize the mortgage right, the mortgagee could file a petition in the people’s court
to auction or sell the collateral. The compromise or sale of collateral shall refer to the
market price of such collateral.
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Chapter 12 Definition Schedule
In the Offering Circular, unless the context otherwise requires, the following terms
shall have the following definition:
“Accelerated Payment Event” means any of the following events:
Accelerated Payment Events which would take effect automatically:
(a) Any Insolvency Event occurs to the Settlor;
(b) Any Servicer Termination Event occurs;
(c) The Servicer fails to duly pay or transfer any amount of funds within
the grace period as set forth in the related Transaction Documents;
(d) (i) When the Trustee shall be replaced or a Back-up Servicer shall be
appointed according to the Servicing Agreement, a qualified successor
Trustee or Back-up Servicer cannot be found within ninety (90) days,
or (ii) in the case where the Back-up Servicer has been appointed, the
Back-up Servicer ceases to provide Back-up Service, or a successor
fails to be appointed with accordance to the Transaction Documents
when the Back-up Servicer is removed;
(e) Within each year before each anniversary of the Trust Effective Date,
the Cumulative Default Rate at the end of any Collection Period is
higher than the corresponding figure for that year: two per cent (2%)
for the first year, or five per cent (5%) for the second year and after;
(f) For the first three (3) consecutive Collection Periods (and if referring
to the first (1st) or second (2nd) Collection Period, for one (1) or two
(2) Collection Period(s) respectively), the average Serious Delinquent
Rate is higher than five per cent (5%);
(g) Item (d) or (e) of the Event of Default materializes, and the Meeting of
Noteholders has not yet announced the occurrence of Event of Default;
Accelerated Payment Events which would take effect after announcement:
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(h) The Settlor or the Servicer fails to perform or comply with any of its
principal obligations under the Transaction Documents (except for the
obligation set forth in item (c) above), and the Trustee reasonably
believes that it could not be remedied or it has not been remedied within
thirty (30) days after the Trustee sends written notice requesting for
such remedy;
(i) Any representation or warranty (except for the Asset Warranty) by the
Settlor under the Transaction Documents was materially false or
misleading when such representation or warranty was made;
(j) Event which has Material Adverse Effect to the Servicer, the Settlor,
the Trustee, or the Mortgage Loans or its Security Right and Interest
occurs;
(k) All or part of the Definition Schedule, Trust Agreement, Servicing
Agreement and Fund Custody Agreement is terminated, or becomes or
will become invalid, illegal, or it becomes impossible to claim the rights
based on the clauses, and therefore causes Material Adverse Effect.
For each of the Accelerated Payment Events which would take effect
automatically listed in item (a) to (g) above, the Accelerated Payment Event shall be
deemed to have occurred on the very day of such occurrence. After the occurrence of
each Accelerated Payment Event which would take effect after announcement listed in
(h) to (k) above, the Trustee shall notify all of the Noteholders. If an Accelerated
Payment Event is announced by the Meeting of Noteholders, the Trustee shall send
written notices to the Servicer, the Fund Custodian, the Notes Custodian, and the Rating
Agencies, and announce that an Accelerated Payment Event has occurred.
If an Accelerated Payment Event has been triggered only by the Serious
Delinquent Rate provided in item (f) above, and based on the information in the
Monthly Servicer Report, for the Collection Periods thereafter the Serious Delinquent
Rate improves to be lower than that stipulated in item (f), the Trustee shall terminate
the accelerated payment of cash flow during the distribution of Collections, and
distribute the Collections according to the order adopted before the occurrence of the
Accelerated Payment Event.
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If the Meeting of Noteholders has announced an Accelerated Payment Event after
the event provided in item (g) above has occurred, the Trustee shall make the
distribution according to the distribution order stipulated in Section 9.6 of the Trust
Agreement.
“Accumulative Default Rate” means for a Collection Period A/B in percentage,
where A means the aggregation of Outstanding Principal Balance of all Defaulted
Loans at the time when they become Defaulted Loans in such a Collection Period and
each preceding Collection Periods; B means the Initial Pool Balance.
“Accumulative Net Loss” means the resulting amount of A+B-C. A equals the
difference of (a) minus(b): (a) means, as of the beginning of a Collection Period, the
aggregation of the Outstanding Principal Balance of each of the Mortgage Loan at the
time it becomes a Defaulted Loan; (b) means, as of the beginning of such Collection
Period, the amount attributable to principal equal to the amount of all the recoveries
made from the Defaulted Loans after netting all the Enforcement Expense occurred for
recovering such Defaulted Loans; B equals the aggregated Outstanding Principal
Balance of all the Mortgage Loans that have become Defaulted Loans during such a
Collection Period, at the time each Mortgage Loan becomes Defaulted Loan; C means
the amount attributable to the principal equal to the amount of all the recoveries of the
Defaulted Loans after netting all the Enforcement Expenses for recovering such
Defaulted Loans.
“Accounting Consultant” means Deloitte Touche Tohmatsu Certified Public
Accountants LLP (special general partnership).
“Annual Servicer Report” means the report prepared by the Servicer in
accordance to the format in Schedule 2 of the Servicing Agreement after the end of
each fiscal year.
“Asset Pool” means, at any point of time, the aggregation of all the Underlying
Assets.
“Asset Warranty” means all the representations and warranties on the conditions
of the Asset Pool as of the Cutoff Date and the Trust Effective Date set forth in Section
11.4 of the Trust Agreement.
“Auditor” means an accounting firm recognized by the Trustee.
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“Back-up Service” means certain services provided by the Back-up Servicer
according to the Servicing Agreement as agreed in Schedule 3 of the Servicing
Agreement.
“Back-up Servicer” means the Back-up Servicer appointed by the Trustee
according to the Servicing Agreement or any of its permitted successors.
“Beneficiary” means any Noteholder and Special Trust Beneficiary.
“Bookbuilding Date” means such date specified in the offering announcements.
“Borrower”/“Mortgagor” means, for each Mortgage Loan, the debtor or its
successor who has the repayment obligation and provides the Mortgage Vehicle as
security for the Mortgage Loan under each Mortgage Loan Agreement.
“Business Day” means any day on which commercial banks in the PRC are open
for business (except for the statutory public holidays in the PRC).
“Calculation Date” means the last day of each calendar month, the first
Calculation date shall be July 31, 2020 and the last Calculation Date shall be the last
day of the calendar month before the last Payment Date.
“CBIRC” means China Banking and Insurance Regulatory Commission.
“CBR” means China Bond Rating Co., Ltd.
“CCDC” means China Central Depository & Clearing Co., Ltd.
“CCXI” means China Chengxin International Credit Rating Co., Ltd.
“CFAE” means Beijing Financial Assets Exchange.
“Change in Laws” means the revisions, supplements, updates or reenactment
made to relevant Laws.
“Class A1 Noteholder” means the holder of Class A1 Notes.
“Class A2 Noteholder” means the holder of Class A2 Notes.
“Class A1 Notes” means a tranche of Notes under such name representing the
corresponding Senior Trust Beneficial Right.
“Class A2 Notes” means a tranche of Notes under such name representing the
corresponding Senior Trust Beneficial Right.
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“Clean-Up Call” means the Settlor’s repurchase of the whole residual Asset Pool
of the Trust according to the Trust Agreement, which is an option for the Settlor.
“Clean-Up Call Price” means the market price of the Asset Pool at the time of
the Clean-up Call.
“CMS” means China Merchants Securities Co., Ltd.
“Co-Borrower” means, for each Mortgage Loan, the debtor or its successor who
has joint repayment obligation under each Mortgage Loan Agreement.
“Collection Period” means the period from a Calculation Date (exclusive) to the
next Calculation Date (inclusive), provided that, the first Collection Period means the
period from the Cutoff Date (exclusive) to the first Calculation Date (inclusive).
“Collections” means the Principal Collections and Income Collections
collectively.
“Collection Transfer Date” means the date on which the Servicer transfers the
Collections to the Trust Account, which shall be determined according to the following
rules:
(a) If the Servicer maintains both a long-term corporate rating of A or higher by
CCXI, and a long-term credit corporate rating of A- or higher by CBR, the
Collection Transfer Date shall be determined according to the following rules:
as for the Collections received during the period from a Calculation Date
(exclusive) to the fifth (15th) Day (inclusive) of the calendar month
immediately after such Calculation Date, the corresponding Collection
Transfer Date is the sixth (6th) Business Day after such fifth (15th) Day of
such calendar month; as for the Collections received during the period from
the fifth (15th) Day (exclusive) of each calendar month to the Calculation
Date (inclusive) immediately after such fifth (15th) Day of such calendar
month, the corresponding Collection Transfer Date is the sixth (6th) Business
Day after such Calculation Date; among which, the first Collection Transfer
Date is the sixth (6th) Business Day after the first Calculation Date.
(b) If the Servicer has either a long-term corporate rating lower than A by CCXI,
or a long-term corporate rating lower than A- by CBR; or item (a) of Right
Perfection Event occurs, and the Settlor or the Trustee shall inform the
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Borrower, the Guarantor (if any), and the Insurer (if any) to pay the payables
to the Trust Account, but the Borrower, the Guarantor (if any) or the Insurer
(if any) continues to pay the Collections to the Servicer, the Collection
Transfer Date is the third (3rd) Business Day after the Servicer receives each
Collection.Any business day within three (3) Business Days after the day the
Servicer receives each Collection, if the Settlor or the Trustee informs the
Borrower, the Mortgagor, the Guarantor (if any), the Insurer (if any) to pay
the payables to the Trust Account, but the Borrower, the Mortgagor, the
Guarantor (if any), the Insurer (if any) continues to pay the Collections to the
Servicer.
(c) The Collection Transfer Date shall be any business day within three (3)
Business Days after the Trust Termination Date, if the Trust terminates; and
any Business Day within three (3) Business Days of the Servicer’s receipt of
any Collection (if any), if the Servicer still receives Collections after the
Trust Termination Date.
If a Collection Transfer Date is subject to modification as a result of changes
in the credit rating of the Servicer by any of the Rating Agencies, such
modification shall become effective according to the rules above. Such a
modification in Collection Transfer Date is not subject to recovery or
reversion even if the Servicer’s credit ratings recover.
“Commingle Reserve Account” is a level 1 sub-account under the Trust Account,
the funds in which will be used to cover the commingle risk.
“Commingle Reserve Amount” means the reserve amount in the Commingle
Reserve Account used to cover the commingle risk at the time when the Servicer does
not have any of the Required Ratings from the Rating Agencies, which shall be equal
to the amount of Collections of such Collection Period(s) where the Servicer expects to
transfer the services to the Back-up Servicer or Successor Servicer, but shall be no less
than the amount of receivables during the Collection Period immediately after the
Servicer loses any of the Required Ratings from the Rating Agencies.
“Credit Asset Data Report” means the data report on Trust Property provided
by the Back-up Servicer to the Trustee and the Rating Agencies according to the format
agreed in Schedule 6 of the Servicing Agreement.
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“Cutoff Date” means 24:00 of March 31, 2020.
“Date”/“Day” means calendar day, except for Business Day as defined otherwise.
“Data File” means the files containing information and data of the Underlying
Asset prepared by the Servicer and delivered by the Servicer to the Trustee and the
Back-up Servicer for the purpose of servicing the Underlying Asset after the
appointment of Back-up Servicer, the format of which shall be compliant with Schedule
5 of the Servicing Agreement.
“Defaulted Loan” means, without duplicative calculation, any of the following
Mortgage Loans:
(a) A Mortgage Loan any payable part of which is more than ninety (90) (not
including ninety (90) days past due after the principal and interest payment
date provided in the Mortgage Loan Agreement; or
(b) A Mortgage Loan which is confirmed as loss by the Servicer according to its
standard serving procedure stipulated in the Loan Servicing Manual; or
(c) A Mortgage Loan which is restructured or extended after the renegotiation
and the execution of a supplement agreement between the Servicer and the
Borrower.
After a Mortgage Loan being confirmed as Defaulted Loan, even if the
Borrower or the Guarantor resumes regular repayment, or if the Mortgage
Loan has been paid off or settled by the Borrower, such Mortgage Loan
cannot be restored to be a normal Mortgage Loan.
“Definition Schedule” means this Schedule which is composed of usage,
definition and interpretation clauses.
“Eligibility Criteria” means, the following criteria to which each Mortgage Loan
and the Security Right and Interest thereof should conform, as of the Cutoff Date and
the Trust Property Delivery Date (or other date otherwise stipulated hereinafter):
A. Criteria for the Borrower (for each Mortgage Loan)：
(a) The Borrower shall be a Chinese citizen or a permanent resident, and a
natural person who is at least eighteen (18) years of age on the loan
disbursement date;
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(b) At the time the Mortgage Loan is disbursed, the Borrower shall not be an
employee who has a labor contract with the Originator;
(c) the Borrower has no occurred default on its payment obligations (except any
delay in payment as provided in item (j) of the Eligibility Criteria) or on any
other major obligations known to the Originator under the Mortgage Loan
Agreement or any other relevant documents, which has not been remedied;
B. Criteria for the Mortgage Loan：
(d) As of the Cutoff Date, with accordance to the five-category loan
classification system applicable to the auto loan business of the Originator,
each Mortgage Loan is a normal loan;
(e) The Mortgage Loan has been disbursed in full, and the whole of the
outstanding amount (including but not limited to the principal, interest, and
other payables) under a Mortgage Loan Agreement has been included in the
Asset Pool, and, the Borrower has authorized the Originator a right of
recoupment, or such right of recoupment has been stipulated in the Mortgage
Loan Agreement;
(f) All payable amounts of the Mortgage Loan shall be made in RMB;
(g) As of the Cutoff Date, the Mortgage Loan has not been charged off according
to the standard procedure of the Originator, nor is it subject to restructuring
or extension;
(h) The applicable law for the Mortgage Loan Agreement is PRC law;
(i) The Mortgage Loan Agreement and the Mortgage Right are legal and valid,
and constitute legal, effective and binding obligations of the Borrower, the
creditor and mortgagee, are entitled to make valid claims against the
Borrower under the Mortgage Loan Agreement;
(j) By the Cutoff Date, there is no any delay of each payment scheduled under
each Mortgage Loan Agreement by the Borrower;
(k) As of the Cutoff Date, the account-age of the Mortgage Loan is no shorter
than five (5) months, and the remaining term of the Mortgage Loan is no
shorter than ten (10) months;
(l) Specific repayment plans are provided in the Mortgage Loan Agreement;
(m) The Mortgage Loan Agreement shall provide that the Borrower, the Co-
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Borrower or the Mortgagor shall accomplish the registration of the Mortgage
Right in the Mortgage Vehicle at the relevant registration authority in PRC,
and as of the Cutoff Date, the Originator was granted a first priority Mortgage
Right in the Mortgage Vehicle;
(n) As of the disbursement of the Mortgage Loan, the initial loan-to-value ratio
is not greater than eighty per cent (80%) (initial loan-to-value ratio =the
amount of loan under the Mortgage Loan Agreement/value of the Mortgage
Vehicle*100%);
(o) As of the Cutoff Date, the Borrower has paid all the costs and fees relating
to the Mortgage Loan payable by the Borrower, and such payment need not
be refunded to the Borrower by the Originator;
(p) Unless the Borrower prepays all the payable amounts (including existing and
prospective, actual and contingent) under relevant Mortgage Loan
Agreement, the Borrower has no right to unilaterally terminate the Mortgage
Loan Agreement;
(q) The Originator and the relevant Borrower have not entered into any
agreement relating to the Mortgage Loan other than the Mortgage Loan
Agreement (except for agreement on direct debiting authorization relating to
such Mortgage Loan);
(r) There is no provision in the Mortgage Loan Agreement prohibiting or
restricting the transfer of the Mortgage Loan and the Security Right and
Interest, and the Originator does not need the consent of the Borrower,
Mortgagor, Guarantor or any other entity to entrust or transfer in whole or in
part of the Mortgage Loan and the Security Right and Interest;
(s) As of the Cutoff Date, the Originator has not waived any of its material right
under the Mortgage Loan Agreement or the Mortgage Right, except for the
right to liquidated damages in case of prepayment;
(t) The Originator has performed and abided by the Mortgage Loan Agreement
and the clauses therein relating to the Mortgage Right;
(u) As of the Cutoff Date, for such Mortgage Loan, there is no unresolved
dispute between the Originator and the Borrower regarding the payable
amount, payment due time, terms of payment or any other aspect of the
Mortgage Loan; nor is there any litigation, arbitration, bankruptcy or
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enforcement proceeding ongoing involving the Mortgage Loan;
(v) As of the Cutoff Date, aside from the statutory right of offset, the relevant
Borrower is not entitled to claim for any deduction or exemption of the
payables under the Mortgage Loan;
C. Criteria for the Mortgage Vehicle:
(w) At the completion of registration of the mortgage over the Mortgage Vehicle
with the relevant registration authority in PRC, the related Mortgage Vehicle
had been insured according to the customary business standard, such
insurance policies include but are not limited to property insurance acquired
in the name of the Borrower but under which the Originator is the primary
beneficiary (except for third-party liability insurance);
D. Criteria for the Disbursement and Selection of the Mortgage Loan:
(x) The Mortgage Loan is disbursed under the standard credit procedure of the
Originator and other relevant policies, practices, and procedures on mortgage
loans;
(y) The Borrower or Mortgagor’s ability to assign or otherwise dispose the
obligations under the Mortgage Loan Agreement or to dispose the Mortgage
Vehicle thereunder without consent of the Originator is prohibited or
restricted by the PRC Laws or the Mortgage Loan Agreement.
“Enforcement Expenses” means all costs, expenses and Taxes (for which the
Servicer shall provide reasonable evidence) reasonably incurred by the Servicer, in
connection with any litigation, arbitration, enforcement against the Borrower or any
other third party (including but not limited to the Guarantor, the Insurer (if any), or a
third-party mortgagor), or during negotiations with such parties, for the disposition of
the Defaulted Loans. The Enforcement Expenses shall be advanced by the Servicer,
and the Servicer shall have the right to withhold all the Enforcement Expenses it has
advanced for all the Defaulted Loans once the Servicer has recovered the whole or part
of any Defaulted Loan.
“Estimated Notice Fee” means the fund reserved in the Service Transfer and
Notice Reserve Account for sending the Right Perfection Notice to each of the Borrow
ers/Mortgagors, the Insurers (or the insured) (if any), and the Guarantor (if any), the
amount of which is estimated to be RMB one hundred thousand Yuan (￥ 100,000) as
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of the Trust Effective Date. At the time of making such reserve, the amount of
Estimated Notice Fee shall be the higher one of A and B, where A is the amount
resulting from the following formula: notice expense = number of recipients * number
of copies required by Law * cost of each registered mail, and The Servicer shall provide
the Trustee with related information for such formula, and B is RMB two hundred
thousand Yuan (￥ 200,000).
“Estimated Service Transfer Fee” means the fund reserved in the Service
Transfer and Notice Reserve Account for the transfer of service when the Servicer does
not have any of the Required Ratings from the Rating Agencies, the amount of which
is estimated to be six hundred thousand RMB Yuan (￥ 600,000) as of the Trust
Effective Date; and the actual amount shall be determined by the Trustee, the Servicer,
and the Back-up Servicer or Successor Servicer after negotiation, once the Back-up
Servicer or Successor Servicer is appointed by the Trustee, and shall be copied to the
Rating Agencies.
“Event of Default” means any of the following events:
(a) The Trustee fails to pay the interest due on the Senior Notes then outstanding
within one (1) Business Days after any Payment Date or within the grace
period approved by the Meeting of Noteholders (however, if the due but
unpaid interest on the Senior Notes then outstanding has been paid in full,
failure to pay returns on the Subordinated Notes shall not constitute an Event
of Default);
(b) The Trustee fails to pay the due but unaided principal of any Notes then
outstanding within one (1) Business Days after the Final Maturity Date or
within the grace period approved by the Meeting of Noteholders;
(c) The Trustee loses the right to continue holding the Trust Property in the name
of the Trust or the capability to perform its obligations under the Transaction
Documents, and no successor Trustee is appointed for the Trust according to
the Transaction Documents;
(d) The Trustee fails to observe or perform any material obligations, terms or
conditions (apart from the obligation to pay the principal or interest on the
Notes) under the Trust Agreement or other Transaction Documents to which
the Trustee is a party, and such failure is reasonably deemed by the Meeting
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of Noteholders as (i) incurable, or (ii) curable but the Trustee fails to cure
such failure within thirty (30) days after a written notice requesting cure was
given to the Trustee by the Meeting of Noteholders; or (iii) curable by
replacing the Trustee according to the Transaction Documents but the
Trustee was not replaced within ninety (90) days after occurrence of the
failure;
(e) The Meeting of Noteholders reasonably believes that any representation or
warranty made by the Trustee in the Trust Agreement or any other
Transaction Document to which it is a party was or is proved to be incorrect
or misleading in any material respect when made, and such breach is
reasonably deemed by the Meeting of Noteholders as (i) incurable, or (ii)
curable but the Trustee fails to cure such breach within thirty (30) days after
a written notice requesting cure was given to the Trustee by the Meeting of
Noteholders; or (iii) curable by replacing the Trustee according to the
Transaction Documents but the Trustee was not replaced within ninety (90)
days after occurrence of the breach.
Upon the occurrence of any of the events listed in items (a) to (c), an Event
of Default shall be deemed to have occurred on the day such event(s) occurs.
Upon the occurrence of either event listed in item (d) and (e), the Meeting of
Noteholders shall decide whether to declare an occurrence of an Event of
Default, and shall instruct the Trustee to notify the Servicer, the Fund
Custodian, the Notes Custodian, the Paying Agent and each Rating Agency
in writing of its decision; before such a decision is made by the Meeting of
Noteholders, the Servicer shall distribute the Collections with accordance to
the accelerated payment schedule of cash flow as set forth in Section 9.5 of
the Trust Agreement; if an Event of Default was declared by the Meeting of
Noteholders, the Trustee shall conduct the distribution with accordance to
the order of distribution as set forth in Section 9.6 of the Trust Agreement.
“Expected Maturity Date” means, for the Class A1 Notes, May 26, 2021; for the
Class A2 Notes, October 26, 2021; and for the Subordinated Notes, April 26, 2023.
Expected Maturity Date is not the actual maturity date of the Notes; the Notes could be
paid off before or after the Expected Maturity Date.
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“Expense Account” is a sub-account under the Payment Account, the funds in
which shall be used to pay for the Trust Expenses.
“Fee Letter” means each of the contracts, agreements or other documents signed
by the Trustee with the Settlor, the Servicer, the Fund Custodian, CBR, the Auditor, the
Notes Custodian/Paying Agent, and other service providers concerning the payment of
fees and compensations arising from the services provided to the Trust.
“Financial Advisor” means Standard Chartered Bank (China) Limited.
“Final Maturity Date” means April 26, 2026.
“Fund Custodian” means Industrial and Commercial Bank of China Limited
Tianjin Branch which is the Fund Custodian under the Fund Custody Agreement, or
any successor institution permitted under the Fund Custody Agreement.
“Fund Custodian Report” means the report, including the annual Fund
Custodian Report and the monthly Fund Custodian Report, prepared by the Fund
Custodian in compliance with the format in Schedule 5 and Schedule 6 of the Fund
Custody Agreement.
“Fund Custodian Reporting Date” means the seventh (7th) Business Day after
the last day of each Collection Period.
“Fund Custodian Termination Event” means any of the following events:
(a) The Fund Custodian is cancelled the securitization fund custodian
qualification according to Laws;
(b) Unless otherwise provided in the Fund Custody Agreement, the Fund
Custodian fails to transfer funds in the Trust Account according to
instructions of the Trustee as agreed in the Fund Custody Agreement, and the
failure is not cured within two (2) Business Days after the receipt of written
notice from the Trustee;
(c) The Fund Custodian materially breaches any of its obligations under the
Fund Custody Agreement (except for the transfer of funds), and such breach
lasts for more than ten (10) Business Days after the Trustee notifies the Fund
Custodian of such breach;
(d) Any statement, representation or warranty of the Fund Custodian in the Fund
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Custody Agreement or any other document submitted by the Fund Custodian
is proved to be false or not corresponding to the facts in any material respect
when it was made;
(e) The long-term corporate rating for the Fund Custodian from any Rating
Agency is lower than A, or the Fund Custodian violates the requirements on
credit rating by other rating agencies recognized by the Trustee;
(f) An Insolvency Event with respect to the Fund Custodian occurs;
(g) The Fund Custodian fails to submit the Fund Custodian Report on or prior to
the corresponding Fund Custodian Reporting Date (unless the date for the
Fund Custodian to provide the Fund Custodian Report is postponed due to
technical failure, computer failure or electronic payment system failure
uncontrollable by the Fund Custodian), and the Fund Custodian Report is not
submitted within three (3) Business Days after the Fund Custodian Reporting
Date.
“Fund Custody Agreement” means the Fund Custody Agreement for Chang Ying
2020-2 Retail Auto Mortgage Loan Securitization Trust, numbered 3372020-
Q337001001, executed between the Trustee and the Fund Custodian, including any
revisions and supplements made to such agreement.
“Fund in Custody” means the funds in the Trust Account.
“Generally Accepted Accounting Principles” means the generally accepted
accounting principles then effective in China.
“TGBAFC” means Tianjin Great Wall Binyin Automotive Finance Company,
Limited.
“Government” means the government of PRC.
“Government Authorities” means (a) the State Council and people’s
governments of provinces, autonomous regions, municipalities directly under the
Central Government, autonomous prefectures, counties, cities, municipal districts,
townships, nationality townships and towns, (b) the National People’s Congress and
people’s congresses in provinces, municipalities directly under the Central Government,
counties, cities, municipal districts, townships, nationality townships and towns, (c) the
Supreme People’s Court, local people’s courts at all levels and other special courts
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including Military Court, Railway Transportation Court, and Maritime Court etc., (d)
The Supreme People’s Procuratorate, local people’s procuratorates at all levels and
other special procuratorates including Military Procuratorate and Railway
Transportation Procuratorate, etc., (e) arbitration tribunals and their branches, and (f)
any government-authorized agencies or private bodies exercising administrative,
legislative, judicial, regulatory, supervising, requisition and tax-imposing rights under
the guidance of or in the name of such authorities.
“Guarantor” means a third party and/or its successor that provides guaranty for
the Borrower’s obligations under the Mortgage Loans.
“ICBC” means Industrial and Commercial Bank of China Limited.
“Income Collections” means collections collected since from the Cutoff Date
(exclusive) from Mortgage Loans and Security Right and Interest in the Asset Pool
deducting the Principal Collections, including but not limited to:
(a) Relevant interest, expense and fees (including after the Borrower exercises
the offset right against its interest, the amount paid by the Settlor for such
interest that was offset, the interest part of the Repurchase Price paid by the
Settlor in accordance with the Trust Agreement, and the interest part of the
Clean-Up Call Price paid by the Settlor in accordance with the Trust
Agreement);
(b) All the interest and investment income generated by the fund in the Trust
Account, including but not limited to the income from Permitted Investment
of funds in the Trust Account;
(c) The remaining part (if any) of the amount that could be classified as interest,
expense and fees out of the recoveries of a Defaulted Loan after deducting
the Enforcement Expenses arising from such Defaulted Loan and the
Enforcement Expenses arising from other Defaulted Loans that have not been
deducted;
(d) The amount paid by the Guarantor in the performance of the warranty
responsibility netting the principal;
(e) The amount that could be classified as interest, expense and fees generated
from the insurance policy in related with the Mortgage Loan or the Mortgage
Vehicles;
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(f) The recovered amount from the enforcement of Mortgage Right under the
Mortgage Loan after deducting the principal;
(g) The amount obtained by the Trustee to dispose of the non-cash Trust Property;
and
(h) Other amount that could be classified as interest in the Trust Property
obtained according to the PRC Laws or the stipulations of the Transaction
Documents.
“Income Sub-account” is a sub-account under the Trust Account, which will be
used to receive and compute the Income Collections.
“Ineligible Asset” means the following Underlying Asset:
(i) That violates the Asset Warranty concerning such Underlying Asset made by
the Settlor, or the material aspects of the Asset Warranty concerning such
Underlying Asset are flawed as of the Cutoff Date and the Trust Effective
Date;
(j) To which a bona fide third party claims Mortgage Right or ownership in the
Mortgage Vehicles because of the failure to conduct the mortgage transfer
registration concerning the related Mortgage Loan, as such that the Mortgage
Right of the Trustee cannot rival the said bona fide third party.
“Initial Pool Balance” means the aggregate Initial Principal Balance of all
Mortgage Loans in the Asset Pool as of the Cutoff Date.
“Initial Principal Balance” means the outstanding principal balance of each
Mortgage Loan as of 24:00 of the Cutoff Date.
“Insolvency Event” means, for the Settlor, the Trustee, the Servicer, the Back-up
Servicer and the Fund Custodian, any of the following events:
(a) The aforementioned institutions file bankruptcy in a people’s court with the
approval from the financial regulatory authority of the State Council (e.g. the
CBIRC), or the financial regulatory authority of the State Council (e.g. the
CBIRC) submits to the people’s court an application for a re-organization or
bankruptcy liquidation of the aforementioned institutions;
(b) A creditor of the aforementioned institutions files a petition in a people’s
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court for declaring such agency bankrupt, and such petition is not rejected or
withdrawn within one hundred and ninety (90) Business Days;
(c) The aforementioned institutions apply for dissolution with the financial
regulatory authority of the State Council (e.g. the CBIRC) due to spin-off,
merger or other matters which will trigger dissolution as prescribed in the
articles of association of such institutions;
(d) The financial regulatory authority of the State Council (e.g. the CBIRC)
orders the aforementioned institutions to dissolve in accordance with the
Regulations on Closure of Financial Institutions;
(e) The financial regulatory authority of the State Council (e.g. the CBIRC)
announces that it will take over the aforementioned institutions;
(f) The aforementioned institutions are unable to or declare to be unable to pay
off their debts as such debts become due; or are deemed unable to pay off
their debts as such debts become due in accordance with PRC Laws; or
(g) The aforementioned institutions cease or will probably cease their main
business operation.
“Insurer” means the insurer of the insurance policies on the Mortgage Loans or
the Mortgage Vehicles.
“Inter-Bank Funding Center” means the National Inter-Bank Funding Center.
“Interest Calculation Date” means the twenty sixth (26th) day of each calendar
month (the first Interest Calculation Date shall be August 26, 2020), but the last Interest
Calculation Date of each class of Notes shall be the day when the principal of such class
is paid off.
“Interest Period” means the period from an Interest Calculation Date (inclusive)
to the next Interest Calculation Date (exclusive), among which the first Interest Period
is the period from the Trust Effective Date (inclusive) to the first Interest Calculation
Date (exclusive).
“Interest Settlement Date” means the day on which the Fund Custodian settles
the interest by quarter, which shall be March 21st, June 21st, September 21st, and
December 21st of each year.
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“Issuance Fees” includes the issuance disclosure expenses incurred for the
purpose of the issuance of the Notes (if any), the issuance and registration service fees,
the wire transfer fees and the Underwriting Fees etc. All the above Issuance Fees will
be paid from the Subscription Amount, and borne by TGBAFC.
“Issuer” means China Foreign Economy and Trade Trust Co., Ltd.
“Joint Lead Underwriters” means Industrial and Commercial Bank of China
Limited and Mizuho Bank (China), Ltd. collectively; unless specifically indicated in
the context, neither party aforementioned will be solely referred to as Joint Lead
Underwriter.
“Laws” means the Constitution, laws, conventions, administrative regulations,
department regulations, local regulations and other regulatory documents promulgated
by the Government Authorities.
“Lead Underwriter/Bookrunner” means China Merchants Securities co. Ltd.
“Legal Counsel” means Beijing Zhong Lun Law Firm LLP, which is a special
general partnership.
“Liquidity Reserve Account” is a level 1 sub-account under the Trust Account,
the funds in which will be used to fill up the deficiency of amount for paying certain
items under Section 9.5.1 of the Trust Agreement.
“List of Underlying Asset” means, for the Underlying Asset entrusted by the
Settlor to the Trustee, the list (the format and content of which shall be acceptable to
the Trustee and the list may be prepared in the form of electronic files or microfilm)
containing the information of each Borrower, prepared by the Settlor and delivered to
the Trustee on the Trust Property Delivery Date according to the stipulation in Section
3.7.1 of the Trust Agreement. Format of the List of Underlying Asset is included in
Schedule 1 of the Trust Agreement.
“Loan Files” means, for an Underlying Asset, all the files, forms, certificates,
agreements or other documents held or maintained by the Originator or its agent before
the Trust Property Delivery Date, or by the Servicer or its agent after the Trust Property
Delivery Date to support or secure the payment of the Underlying Asset, or relating to
the Underlying Asset, whether in physical or electronic form, including but not limited
to the loan application documents of the Borrower, registration records of the Mortgage
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Right, investigation and approval form for personal auto-loan, Mortgage Loan
Agreement, records and vouchers during the Collection Period, and documents
evidencing the security interest and insurance policy (if any).
“Loan Servicing Manual” means policies and procedures for the servicing of the
Asset Pool (including amendment to it from time to time).
“Material Adverse Change” means any adverse change in the legal status,
financial situation, assets or business perspective of any natural person, partnership,
limited liability company, joint stock limited company, trust (including business trust),
non-corporate organization, joint venture, enterprise, governmental entity, or any other
entity that would cause Material Adverse Effect to such parties’ ability to perform their
respective obligations under the Transaction Documents.
“Material Adverse Effect” means any event, condition, regulatory action,
sanction or penalty that would cause material adverse effect on any of the following:
(a) the recoverability of the Underlying Asset; (b) the financial or other conditions,
business or assets of the Settlor or the Servicer; (c) the ability to perform its obligation
under the Transaction Documents of the Settlor, the Trustee, the Servicer, the Fund
Custodian, the Notes Custodian and the Paying Agent; (d) the interest of Noteholders;
(e) the Trust or the Trust Property.
“Maximum of Priority Expense Payment” means, for each Trust Distribution
Date, the maximum amount of Reimbursable Expenses that could be paid from the
Trust Account and prior to the payment of principal and interest on the Senior Notes
under the provisions in the Trust Agreement, which is RMB forty thousand Yuan
(￥40,000).
“Meeting of Noteholders” means the meeting of Noteholders called and
convened according to Section 19 of the Trust Agreement.
“Mizuho China” means Mizuho Bank (China), Ltd.
“Monthly Servicer Report” means the report prepared by the Servicer each
month in compliance with the format in Schedule 2 of the Servicing Agreement.
“Mortgage Loan” means the personal automobile mortgage loans disbursed by
TGBAFC under a Mortgage Loan Agreement and has been entrusted to the Trustee
with accordance to the Trust Agreement.
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“Mortgage Loan Agreement” means, for a Mortgage Loan, the agreement and
all its amendments and supplements entered into by TGBAFC with the Borrower, the
Co-Borrower, the Mortgagor and the Guarantor under which TGBAFC agrees to
disburse personal automobile mortgage loans, the Mortgagor agrees to grant Mortgage
Right in the Mortgage Vehicle for TGBAFC as the mortgagee, and the Guarantor (if
any) agrees to provide guaranty for TGBAFC. Such agreements shall be, in all material
aspects, identical with at least one of the formats as specified in Schedule 10 of the
Trust Agreement.
“Mortgage Right” means the mortgage right established in the Mortgage Vehicle
for TGBAFC to secure the payment of Mortgage Loan.
“Mortgage Vehicle” means the vehicle upon which the Mortgage Rights attached.
“NAFMII” means National Association of Financial Market Institutional
Investors.
“Net Subscription Amount” means the remaining fund after deducting the
Issuance Fees from the full Subscription Amount.
“Noteholder” means the investors holding the Notes, including Senior
Noteholders and Subordinated Noteholders.
“Notes” means the asset-backed securities consisting of the Senior Notes and the
Subordinated Notes issued by the Issuer (the Trustee) to the Noteholders under the Trust
Agreement and the Offering Circular, which is evidence of the holders’ corresponding
Trust Beneficial Right under the Trust.
“Notes Custodian” means CCDC or any other institution designated by
Government Authorities to provide registration and custody services for the Notes.
“Notes Payment Account” is a sub-account under the Payment Account, the
funds in which will be used to and pay for the principal and interest due on the Notes.
“Offering Circular” means the Chang Ying 2020-2 Retail Auto Mortgage Loan
Asset-Backed Securities Offering Circular formulated by the Issuer according to the
applicable PRC Laws for the issuance of the Notes.
“Ordinary Matters” means the matters to be approved by the Meeting of
Noteholders, aside from the Unanimous Consent Matters and the Special Matters.
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“Outstanding Principal Balance” means, for a Mortgage Loan on any date, an
amount equal to A-B-C, where A is the Initial Principal Balance, B is all repaid
principal of such Mortgage Loan from the Cutoff Date to such date, and C is all charged
off principal of such Mortgage Loan from the Cutoff Date to such date; or, for the Notes
of each class on any date, an amount equal to A-B, where A is the principal balance of
the Notes of such class on the Trust Effective Date, and B is all the repaid principal of
the Notes of such class from the Trust Effective Date to such date.
“Overdue Loan” means the Mortgage Loan any part of whose principal and
interest under the Mortgage Loan Agreement is overdue for more than one (1) day but
less than ninety (90) days (including ninety (90) days) after the agreed Payment Date
pursuant to the standard servicing procedure of the Servicer.
“Payment Accout” is a level 1 sub-account under the Trust Account, which will
be used to allocate payables in the Collections.
“Paying Agent” means CCDC or any other institution designated by Government
Authorities to provide the service of paying principal and interest on the Notes.
“Payment Date” means the twenty-sixth (26th) day of each month (the first
Payment Date shall be June 26, 2020), but if such day is not a Business Day, the
Payment Date will be the immediately following Business Day.
“PBOC” means People’s Bank of China.
“Permitted Investment” means the investment of idle funds in the Trust Account
by the Trustee according to the Trust Agreement, including deposits denominated and
settled in RMB with a financial institution which is a Qualified Entity.
“Principal Collections” means any of the following items of the Collections
collected from the Mortgage Loan and Security Right and Interest in the Asset Pool
since from the Cutoff Date (exclusive):
(a) Any principal of the Mortgage Loans repaid by the Borrower;
(b) Any amount paid by the Settlor equal to the offset principal due to the
Borrower’s exercise of its offset right against its principal payables under the
Mortgage Loan;
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(c) The principal amount contained in the Repurchase Price paid by the Settlor
according to the Trust Agreement;
(d) The principal part of the Clean-Up Call Price paid by the Settlor according to
the Trust Agreement;
(e) Any remaining amount (if any) equal to all of the amount attributable to
principal out of the recovered funds of the Defaulted Loans after deducting the
Enforcement Expenses arising from the Defaulted Loans and the Enforcement
Expenses that have not been deducted according to item (c) of the Income
Collections;
(f) The principal amount paid by Guarantor when performing its guaranty
obligation;
(g) Any amount attributable to principal which is generated from the pay-out of
insurance policies relating to the Mortgage Loans;
(h) Any amount attributable to principal in the recovered funds from the
enforcement of the Mortgage Right under the Mortgage Loan;
(i) Any amount attributable to principal obtained by the Trustee by disposing the
non-cash Trust Property; and
(j) Other amount attributable to principal in the Trust Property obtained according
to the PRC Laws or the stipulations of the Transaction Documents.
“Principal Sub-account” is a sub-account established by the Trustee under the
Trust Account, which will be used to receive and compute the Principal Collections.
“Principal Underwriters” means the Lead Underwriter and the Joint Lead
Underwriters; unless specifically indicated in the context, any party aforementioned
will not be solely referred to as Principal Underwriters.
“PRC” means the People’s Republic of China (excluding for the purpose of
Transaction Documents Hong Kong Special Administrative Region, Macao Special
Administrative Region, and Taiwan region).
“Qualified Entity” means the banking financial institutions except for rural
commercial bank and village and town banks, and recognized by the Trustee.
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“Rating Agencies” means China Chengxin International Credit Rating Co., Ltd.
and China Bond Rating Co., Ltd. The “Any Rating Agency” hereinafter referred to
means CCXI or CBR; unless specifically indicated in the context, CCXI or CBR will
not be separately referred to as Rating Agencies. For a rating referred to in the
Transaction Documents, in case CCXI or CBR temporarily could not provide a long-
term rating, the long-term rating provided by the other party will be used.
“Registration and Custody Agreement” means the Registration and Custody
Agreement executed by and between the Trustee and the Notes Custodian/Paying Agent,
including any revisions and supplements made to such agreement.
“Reimbursable Expenses” means for any relevant party, the actual costs and
expenses, including reasonable attorney fees, litigation fees, arbitration fees and
enforcement fees in connection with any litigation or arbitration arising out of the
transactions among the relevant parties of the transaction (deducting the attorney fees,
litigation fees, arbitration fees and enforcement fees that should be paid by the other
party under any court judgment or arbitration award) and the necessary expenses paid
by such party for managing the Trust Property under the Transaction Documents,
excluding: ①the attorney fees, litigation fees, arbitration fees and enforcement fees
that should be paid by such party under any court judgment or arbitration award
incurred due to the willful misconduct, bad faith or negligence of such party, and ②
the fees for the services provided by such party.
For the Trustee, in addition to the aforementioned expenses and costs, such actual
expenses and costs include the market circulation expenses in relation to the relevant
class of Notes (if any), expenses for convening the Meeting of Noteholders and
expenses for accepting services by the Back-up Servicer and Successor Servicer; for
the Servicer, in addition to the aforementioned expenses and costs, such actual expenses
and costs include service charges incurred from extrusted withholding when the
Servicer recover the Mortgage Loans, value-added tax and surcharges (if any) paid by
the Servicer for the Collections it received from the Underlying Assets, and wire
transfer fees incurred in the process of transferring funds from the Servicer to the Trust
Account, excluding any of Enforcement Expenses; for the Fund Custodian, in addition
to the aforementioned expenses and costs, such actual expenses and costs include wire
transfer fees, etc.
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“Report on Agreed Proceedings against Monthly Servicer Report” means the
report issued by an independent external accounting firm chosen by the Trustee on the
Monthly Servicer Report.
“Repurchase Cutoff Date” means, for the repurchase of Ineligible Asset provided
in the Trust Agreement, the last day of the Collection Period during which the Trustee
requests the repurchase of the Ineligible Asset; for the Clean-up Call provided in the
Trust Agreement, the last day of the Collection Period prior to the Collection Period in
which the Settlor notifies the Trustee of the Clean-up Call.
“Repurchase Price” means, the price paid or to be paid by the Settlor to
repurchase an Ineligible Asset according to Section 4 of the Trust Agreement, i.e. the
aggregation of the following three amounts as of 24:00 of the Repurchase Cutoff Date:
(a) the Outstanding Principal Balance of such Ineligible Asset; (b) the principal of such
Ineligible Asset which has been charged off; and (c) all the due and unpaid interest of
the Outstanding Principal Balance of such Ineligible Asset from the Cutoff Date to the
Repurchase Cutoff Date and all the due and unpaid interest of all the principal which
has been charged off from the Cutoff Date to the Repurchase Cutoff Date.
“Required Commingle Reserve Amount “means (a) zero (0), when the Servicer
has all the Required Ratings; or (b) the Commingle Reserve Amount, when the Servicer
does not have any of the Required Ratings from the Rating Agencies.
“Required Liquidity Reserve Amount” for each Trust Distribution Date, means
the amount equal to one per cent (1%) of the aggregation of the Outstanding Principal
Balance of all the Mortgage Loans in the Asset Pool as of the end of the Collection
Period before such Trust Distribution Date.
“Required Service Transfer and Notice Reserve Amount” means (a) zero (0),
when the Servicer has all of the Required Ratings; (b) the combination of Estimated
Notice Fee and Estimated Service Transfer Fee, when the Servicer loses any of the
Required Ratings given by the Rating Agencies; (c) Estimated Notice Fee will be zero
(0) after notice expense is paid off and Estimated Service Transfer Fee will be zero (0)
after service transfer expense is paid off.
“Required Rating” means for CCXI, long-term corporate rating of A; for CBR,
long-term corporate rating of A-.
“Right Perfection Events” means any of the following events:
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(a) Any Servicer Termination Event occurs, resulting in the removal of the
Servicer;
(b) The Servicer loses any of the Required Ratings given by the Rating Agencies;
(c) The Settlor loses any of the Required Ratings given by the Rating Agencies;
(d) Any Insolvency Event occurs to the Settlor;
(e) For the relevant Mortgage Loan only, one of the following occurs and the
Trustee initiates a litigation or arbitration in its own name under the
provisions in the Servicing Agreement: (i) the Borrower or the Mortgagor
fails to perform any of its obligations under the Mortgage Loan Agreement
or the Security Right and Interest, so that against which such litigation or
arbitration needs to be brought, or (ii) the Guarantor (if any) fails to fulfill its
obligation under a guaranty, so that against which such litigation or
arbitration needs to be brought, or (iii) the Insurer fails to fulfill its insurance
responsibilities, so that against which such litigation or arbitration needs to
be brought.
“Right Perfection Notice” means the notice sent to the Borrower, the Insurer (if
any), and the Guarantor (if any), for the perfection of all or part of the Trustee’s interest
in the Underlying Assets. Format of such Notice shall be compliant with that in the
Schedule 6 of the Trust Agreement or that otherwise recognized by the Laws then
applicable.
“RMB” means the legal currency of the PRC.
“Security” means right and interest created for the creditor, for securing the
creditor’s right or realizing of such right (including but not limited to guarantee,
mortgage, pledge, lien, deposit, right of priority or other interest generated from other
similar priority arrangement), no matter whether such interest is based on applicable
PRC Laws or agreements, whether such interest is or not registered or perfected, and
whether such interest is or not relied on the occurrence or existence of some future
events or circumstances.
“Security Right and Interest” means, for each Mortgage Loan, any security
interest relating to the Mortgage Loan granted for TGBAFC, including but not limited
to Mortgage Right, third-party guaranty, insurance policies related to the Mortgage
Vehicle and the insurance benefits, damages and other proceeds derived from such
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insurance policies (except for the subsidies on interest related to such Mortgage Loan,
whether or not having been received by the TGBAFC, such subsidies on interest shall
not be included in the Asset Pool).
“Senior Noteholder” means the holder of Senior Notes, including Class A1
Noteholder and Class A2 Noteholder.
“Senior Notes” means the Notes representing the Senior Trust Beneficial Right,
including Class A1 Notes and Class A2 Notes.
“Senior Trust Beneficial Right” means the beneficial right to receive distribution
from the Trust prior to the Subordinated Trust Beneficial Right, which is represented
by the Senior Notes.
“Serious Delinquent Loan” means the Mortgage Loan any part of whose
principal and interest under the Mortgage Loan Agreement is past due for more than
sixty (60) days (not including sixty (60) days) but less than ninety (90) days (including
ninety (90) days) after the loan payment date pursuant to the standard servicing
procedure of the Servicer.
“Serious Delinquent Rate” means, for any Collection Period, A/ (B-C). A shall
be the aggregation of the Outstanding Principal Balance of all the Serious Delinquent
Loans at the end of the last day of such Collection Period; B shall be the Initial Pool
Balance; C shall be the aggregation of all the Principal Collections collected from the
Asset Pool from the Cutoff Date until before the beginning of such Collection Period.
“Service” means the specially designated services provided by the Servicer
according to the Servicing Agreement as agreed in Schedule 1 of the Servicing
Agreement.
“Service Fees” means, during each Collection Period, the service fees paid to each
party of the Transaction Documents from the Trust Account. (a) note custody fees and
paying agent compensation charged by the Notes Custodian and Paying Agent
according to the corresponding Fee; Letters; (b) Trustee service fees charged by the
Trustee according to the corresponding Fee Letters; (c) Fund custodian service fees
charged by the Fund Custodian according to the corresponding Fee Letters; (d) Service
fees charged by the Servicer according to the corresponding Fee Letters, and any
interest (if any) accrued on the Collections in the Servicer’s account before the Servicer
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transfers the Collections to the Trust Account on each Collection Transfer Date; (e)
Rating agency service fees charged by the CBR (for providing the initial credit rating
and tracking credit rating); (f) Service fees charged by the Back-up Servicer (if any)
according to the corresponding Fee Letters.
“Service Transfer and Notice Reserve Account” means a level 1 sub-account
under the Trust Account, the balance in which will be used to pay for the specific
expenses of replacing the Servicer and/or sending Right Perfection Notice.
“Servicer” means Tianjin Great Wall Binyin Automotive Finance Company,
Limited, in its capacity as the Servicer under the Servicing Agreement, or any successor
institution permitted by such Agreement.
“Servicer Transfer Plan” means the plan for the Servicer to transfer the Services
to the Back-up Servicer or Successor Servicer according to the Servicing Agreement,
the format and substance of which shall be recognized by the Servicer and the Trustee.
“Servicer Report” means Annual Servicer Report and Monthly Servicer Report.
“Servicer Reporting Date” means the sixth (6th) Business Day after the last day
of each Collection Period.
“Servicer Termination Event” means any of the following events:
(a) The Servicer fails to timely make payment on any Collections Transfer Date
as required under the Servicing Agreement (unless such failure is caused by
any technique failure, computer failure or electronic payment system failure
uncontrollable by the Servicer, resulting in the postpone of such Collections
Transfer Date), and the payment is not made within three (3) Business Days
after the Collections Transfer Date;
(b) The Servicer ceases or indicates that it will cease the entire or the material
part of the personal auto loan business;
(c) An Insolvency Event with respect to the Servicer occurs;
(d) The Servicer fails to maintain the qualification, permission, approval,
authorization and/or consent needed for performing the substantial
obligations under the Servicing Agreement, or such qualification, permission,
approval, authorization and/or consent are suspended, withdrawn or
rescinded;
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(e) The Servicer fails to deliver the relevant Monthly Servicer Report on or prior
to the corresponding Servicer Reporting Date (unless such failure is caused
by any technique failure, computer failure or electronic payment system
failure which is beyond the control of the Servicer, causing the Servicer to
postpone providing the Monthly Servicer Report), and still fails to deliver
such report within five (5) Business Days after the Servicer Reporting Date;
(f) The Servicer seriously breaches: (i) any obligation other than the remittance
and reporting obligations; (ii) any representation or warranty made by the
Servicer in the Transaction Documents, and after the Servicer actually knows
about such breach (regardless of whether the Trustee receives the notice),
such breach still continues for more than ten (10) Business Days, resulting in
Material Adverse Effect to the recoverability of Asset Pool;
(g) The Meeting of Noteholders reasonably believes that the Material Adverse
Change has incurred with respect to the Servicer;
(h) Only when TGBAFC is acting as the Servicer, the Servicer fails to comply
with the Servicing Agreement and fails to take all the original Loan Files
specified by the Servicing Agreement and all documents related to such Loan
Files under the Servicing Agreement within ninety (90) days after the Trust
Effective Date as required by the Trustee;
(i) Within ninety (90) days after informing the Servicer of the reviewing result
of the Report on Agreed Proceedings against Monthly Servicer Report in
writing, the Trustee reasonably believes that: (i) the Servicer has materially
breached the representation or warranty the Servicer made in any Transaction
Document; or (ii) the result of such agreed proceedings is unsatisfying. When
any of the circumstances in item (i) and (ii) occurs, the Trustee shall inform
the Servicer immediately, the Servicer shall reply in writing within three (3)
Business Days after receiving such notice. If the Trustee is still unsatisfied
with the Servicer’s written reply, the Trustee shall submit such reply to the
Meeting of Noteholders to decide; and if the Meeting of Noteholders
reasonably believes that Material Adverse Effect has already occurred, then
a Servicer Termination Event has occurred.
“Servicer Termination Notice” means the notice sent by the Trustee, the
successor Servicer or the Back-up Servicer to each of the Borrower/Mortgagor,
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Guarantor (if any), Insurer (if any), after the Servicer is discharged according to the
Servicing Agreement, of which the format shall be compliant with that provided in
Schedule 4 of the Servicing Agreement.
“Servicing Agreement” means the Servicing Agreement for Chang Ying 2020-2
Retail Auto Mortgage Loan Securitization Trust, numbered 3372020-Q337001002,
executed between the Trustee and the Servicer, including any of revisions and
supplements made to such agreement.
“Settlor”/“Originator” means Tianjin Great Wall Binyin Automotive Finance
Company, Limited.
“Special Matters” means the Special Matters listed under Section 19.6 of the
Trust Agreement.
“Special Trust Beneficiary” means the Servicer.
“Special Trust Beneficial Right” means the beneficial right of the Special Trust
Beneficiary to receive Special Trust Benefits during the Trust Duration.
“Special Trust Benefit” means the trust benefits of the Special Trust Beneficiary
according to Section 9.10 of the Trust Agreement.
“Subordinated Noteholder” means the holder of the Subordinated Notes.
“Subordinated Notes” means the Notes representing the Subordinated Trust
Beneficial Right.
“Subordinated Trust Beneficial Right” means the beneficial right to receive
distribution from the Trust subordinate to the Senior Trust Beneficial Right, which is
represented by the Subordinated Notes.
“Subscription Amount” means the total amount raised by the Issuer (not
deducting the Issuance Fees) as of the Subscription Date through the issuance of the
Notes (except for the Notes held by the Originator).
“Subscription Date” means the second (2nd) Business Day after the
Bookbuilding Date; the specific date will be disclosed in the offering announcements.
“Successor Fund Custodian” means the successor fund custodian appointed by
the Trustee according to the Fund Custody Agreement or any of its permitted successors.
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“Successor Servicer” means the successor servicer appointed by the Trustee
according to the Servicing Agreement or any of its permitted successors.
“Target Balance” means the certain balance amount of Class A1 Notes as of each
Payment Date, which is stated in the Schedule 11 of the Trust Agreement.
“Taxes” means any current and potential taxes, fees and other governmental
charges in any nature collected by the Government Agencies with jurisdiction or the
authorized agencies thereunder.
“Tax Consultant” means Shanghai Deloitte Tax Ltd. Beijing Office.
“Tax Reserve Account” is a level 1 sub-account under the Trust Account, the
balance in which will be used to pay for the Taxes afforded by the Trust Property.
“Transaction Documents” means the Definition Schedule, the Trust Agreement,
the Servicing Agreement, the Fund Custody Agreement, the Underwriting Agreement,
the Fee Letters, the Registration and Custody Agreement and other agreements and
documents related to the Trust.
“Trust” means the Chang Ying 2020-2 Retail Auto Mortgage Loan Securitization
Trust created by the Settlor and the Trustee pursuant to the Trust Agreement.
“Trust Account” means an independent RMB account established at the Fund
Custodian by the Trustee solely for the Trust, which will be used for collecting and
depositing the Trust Property in the form of cash, paying to the Noteholders the
corresponding Trust Benefit, paying to the Special Trust Beneficiary the corresponding
Special Trust Benefit and paying other related fees. The account name is China Foreign
Economy and Trade Trust Co., Ltd., the account number is 0302090629300146263,
CNAPS code is 102110000638, and the bank name is Industrial and Commercial Bank
of China Limited Tianjin Ocean High-tech Development Zone Sub-branch., under
which there shall be a Trust Collection Account (including the Principal Sub-account
and the Income Sub-account), a Payment Account (including the Notes Payment
Account and the Expense Account), a Liquidity Reserve Account, a Service Transfer
and Notice Reserve Account, a Commingle Reserve Account and a Tax Reserve
Account.
“Trust Agreement” means the Trust Agreement for Chang Ying 2020-2 Retail
Auto Mortgage Loan Securitization Trust, numbered 3372020-X337001001, executed
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by and between the Settlor and the Trustee, including any revisions and supplements
made to such agreement.
“Trust Beneficial Right” means the beneficial right of the Beneficiary to receive
the corresponding Trust Benefit or Special Trust Benefit under the Trust Agreement.
Trust Beneficial Right consists of the Senior Trust Beneficial Right, the Subordinated
Trust Beneficial Right and the Special Trust Beneficial Right.
“Trust Benefit” means the Trust Property net of all the expenditures and fees
undertaken by the Trust Property which constitutes the benefit of the Noteholders.
“Trust Collection Account” is a level 1 sub-account under the Trust Account,
which will be used to receive the Collections.
“Trust Distribution Date” means the tenth (10th) Business Day after the last day
of each Collection Period, but if such date is later than the Trustee Reporting Date, then
the Trustee Distribution Date shall be no later than the Trustee Reporting Date.
“Trust Duration” means the period of time between the Trust Effective Date
(inclusive) to Trust Termination Date (exclusive).
“Trust Effective Date” means the effective date of the trust when all the
conditions are met (or waived by the rightful party) under Section 3.5 of the Trust
Agreement. In this Trust, the Trust Effective Date is the Trust Property Delivery Date.
“Trust Expenditures “means during each Collection Period, all the fees and other
expenditures related to the Transaction Documents and the management of the Trust
paid out from the Trust Account, including Service Fees and Reimbursable Expenses
of each party of the Transaction Documents, and the fees and expenses advanced by
the parties to the Transaction Documents that is compensated with the funds in the Trust
Account.
“Trust Fund” means trust property in the form of cash.
“Trust Property” means the Asset Pool the Trustee acquired from the Settlor
arising out of the Trustee’s commitment of the Trust and all property that the Trustee
acquired due to its management, usage and disposition of the Trust Property.
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“Trust Property Delivery Date” means the day on which the Settlor delivers the
Trust Property to the Trustee under the Trust Agreement, specifically, the first (1st)
Business Day after the Subscription Date.
“Trustee Report” means the report, including the annual Trustee Report and the
monthly Trustee Report, prepared by the Trustee under Schedule 9 of the Trust
Agreement.
“Trust Termination Date” means the date on which any of the following events
occurs:
(j) The purpose of the Trust cannot be realized;
(k) The Trust is revoked or is determined to be invalid or is ordered to terminate
by the court or arbitration institutions according to the Laws;
(l) CBIRC or the relevant regulatory authorities orders the termination of the
Trust under the Laws;
(m) The Meeting of Noteholders decides to terminate the Trust before the Final
Maturity Date;
(n) The Trust Property is fully liquidated (including by Clean-Up Call);
(o) The Final Maturity Date arrives.
“Trustee” means China Foreign Economy and Trade Trust Co., Ltd., and any
permitted successor institution.
“Trustee Eligibility Criteria” means trust companies satisfying the following
requirements:
(a) validly existing, and holds a financial license issued by CBIRC;
(b) holds the qualification for trustees of special purpose trust approved by
CBIRC;
(c) other requirements by CBIRC and PBOC; and
(d) approved by the Meeting of Noteholders (except for the initial Trustee).
“Trustee Reporting Date” means the fifth (5th) Business Day prior to the
Payment Date.
“Trustee Resignation Event” means any of the following events:
(a) The Trustee, the Settlor, and the Meeting of Noteholders reaches a consensus
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for the Trustee to resign;
(b) The Trustee is not able to continue performing its obligations as Trustee
under the Trust Agreement because of amendments to the current PRC Laws;
(c) The Trustee has not received any compensation for four (4) consecutive
Collection Periods.
“Trustee Termination Event” means any of the following events:
(a) The Trustee disposes of the Trust Property in a manner against the Trust
Agreement, or was grossly negligent in the management or disposition of the
Trust Property, violating its duties under the Trust Agreement, and the
Meeting of Noteholders decides to discharge the Trustee;
(b) The Trustee fails to pay, transfer funds or deposit funds according to the Trust
Agreement or the other Transaction Documents, unless such failure is caused
by fraud, willful misconduct, bad faith or negligence of the other parties,
which are irrelevant to the Trustee, to the Transaction Documents or any third
party, or is caused by force majeure or technical failure, computer failure,
failure in electronic payment system or similar events, which are beyond the
control of the Trustee;
(c) The Trustee materially breaches any representation, warranty or covenant of
the Trustee under the Trust Agreement or the other Transaction Documents;
or the Trustee fails to substantially comply with or perform the covenant and
obligation under the Trust Agreement or the other Transaction Documents;
(d) The Trustee fails to satisfy the Trustee Eligibility Criteria;
(e) An Insolvency Event with respect to the Trustee occurs.
“Unanimous Consent Matter” means the Unanimous Consent Matters agreed in
Section 19.5 of the Trust Agreement.
“Underlying Asset” means each Mortgage Loan and the Security Right and
Interest listed in the List of Underlying Asset entrusted by the Originator to the Trustee
to create the Trust on Trust Property Delivery Date.
“Underwriter”/“Syndicate Member” means all the institutions engaged in the
underwriting of the Notes.
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“Underwriting Agreement” means the Underwriting Agreement for Chang Ying
2020-2 Retail Auto Mortgage Loan Asset-Backed Notes, numbered 3372020-
Q337001003, executed by and between the Issuer, the Originator, and the Underwriters,
including any revisions and supplements to such agreement.
“Underwriting Fees” means the payments received by the Principal Underwriters
for providing service of underwriting the corresponding Notes under the Underwriting
Agreement, which are borne by TGBAFC.
“Underwriting Syndicate” means the group of Syndicate Members organized by
the Principal Underwriters under the Underwriting Syndicate Agreement for the
underwriting of the Notes.
“Underwriting Syndicate Agreement” means the Underwriting Syndicate
Agreement for Chang Ying 2020-2 Retail Auto Mortgage Loan Asset-backed Notes
entered by and between all the Underwriters, including any revisions and supplements
made to such agreement.
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Settlor/Originator/Servicer
Tianjin Great Wall Binyin Automotive Finance Company,
Limited
F09, C3 Building, MSD-C Zone, 79 First Street, Tianjin Economic-Technological Development
Area, Tianjin
Issuer / Trustee
China Foreign Economy and Trade Trust Co., Ltd.
F6, Middle Building, Chemsunny World Trade Centre, 28 Fuxingmen Nei Street, Xicheng
District, Beijing
Bookrunner / Lead Underwriter
China Merchants Securities Co., Ltd.
111 Fuhua 1st Road, Futian Street, Futian District, Shenzhen
Joint Lead Underwriter
Industrial and Commercial Bank of China Limited
55 Fuxingmen Nei Avenue, Xicheng District, Beijing
Joint Lead Underwriter
Mizuho Bank (China), Ltd.
21F, 23F, Shanghai World Financial Center, 100 Century Avenue, China (Shanghai) Pilot Free
Trade Zone, People’s Republic of China
Financial Advisor
Standard Chartered Bank (China) Limited
Standard Chartered Tower, 201 Century Blvd., Pu Dong New Area, Shanghai, People’s Republic
of China
Fund Custodian
Industrial and Commercial Bank of China Limited Tianjin
Branch
123 Weidi Street, Hexi District Tianjin
Notes Custodian /Paying Agent
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China Central Depository & Clearing Co., Ltd.
10 Finance Street, Xicheng District, Beijing