How does a financial leasing company participate in Pre-ABS? (with case)

How does a financial leasing company participate in Pre-ABS? (Attached with case) What is Pre-ABS?

Now because the Internet is fast enough，Traffic growth is fast enough，The bigger problem that many companies face is that they don’t have the first money to invest in assets.，What's more, let's talk about back-end asset securitization.，Now the Pre-ABS business is a bridge fund before doing ABS.，I'll give it to you first to form a debt.，Then when the assets reach the standard issuance standard, I will issue them，finally get rewarded。

This type of business model is a major trend in the future，Includes Pre-REITs，Now we find that there are many institutions in the market that do。

Generally speaking, if it is consumer finance, Pre-ABS basically has this business model.，I will invest in a fund，Together we implement the Fund Action Plan，A company comes to provide me with some customers and risk control，I'll lend money，After the loan is issued, we use the SPV as the original equity holder to issue the asset plan.，to finance，Return the money (the source of repayment is ABS and debt collection)。Here Pre-ABS and the enterprise jointly divide the interest and issuance。

Equivalent to a bridge financing before the issuance of ABS，Can be used to create more basic assets，It can also be used to smooth the cash flow during the ABS issuance period.。To put it bluntly, cross the bridge，But the bridge can also be stretched very long。

1. background
2. Business positioning
3. Banks participating in the path can provide loans to enterprises by investing in Pre-ABS.，And before disbursing loans, we proactively select intermediaries that will later undertake corporate ABS.，Participate in the issuance of ABS throughout the process。The figure below shows the traditional Pre-ABS transaction structure for traditional enterprises such as financial leasing.。

Case：Lifan Financial Leasing-Xinwang Bank Pre-ABS Fund March 2025，Lifan Financial Leasing(Shenzhen)Co., Ltd. established a comprehensive cooperative relationship with Xinwang Bank Co., Ltd., the first private bank in Sichuan, on automobile retail asset credit business，Lifan Leasing was approved for a credit line of RMB 200 million by Xinwang Bank for its innovative financial structure product pre-ABS consumer credit。

This cooperation takes automobile consumer financial assets as the starting point，Both sides summarized the funds in the financial market、Advantages of trust structured products，Creatively combine traditional bank current loan products with later asset transfer channels，Developed bank credit cooperation for Pre-ABS products。

In a new cooperation mode，Lifan Leasing relies on Xinwang Bank's credit funds to form automobile consumer financial assets，Then match the subsequent asset transfer channels such as asset securitization、Transfer assets out through asset packages or receivables transfer and other channels，Improve the asset package collection and payment structure。This innovative business has high capital utilization efficiency，Characteristics of low capital accumulation。

This innovative business model is the first in the western leasing market and is a highlight of innovation between Lifan Leasing and the bank.，It is also a diversified exploration model made by industrial leasing businesses and financial institutions such as Internet banks based on the current financial ecology and economic environment.。Lifan Leasing maintains traditional bank cooperation while，We will also explore more in-depth cooperation with various financial peers.，Innovative peer model。

In addition to Pre-ABS for traditional enterprises such as financial leasing，Some city commercial banks and private banks have begun to participate in Internet consumer finance Pre-ABS business。

Trust Company Participates in Pre-ABS Path Trust Company Launches Collective Fund Trust，Make Pre-ABS Investments，And in the early stage, we actively choose the agency to undertake the ABS business in the later stage.，Participate in the whole process，It can also help companies launch the Association of Traders ABN；It can also be used as a channel for Pre-ABS investment by commercial banks.。

Case：Zhejiang • Yixin Leasing PRE-ABS Collective Fund Trust Plan [Product Name] Zhejiang • Yixin Leasing PRE-ABS Collective Fund Trust Plan [Product Scale] RMB 834 million [Product Period] 4 months，After 3 months, the financing party has the right to choose to terminate early。【Subscription Starting Point】1 million RMB，The excess amount shall be increased by an integer multiple of 100,000 yuan.。

[Purpose of funds] Trust funds are used to issue trust loans to Yixin Leasing，Yixin Leasing will use the funds to issue loans/lease payments to consumers/lessees，The above claims form the underlying assets of ABS。[Income Distribution] Repay the corresponding principal and corresponding interest when partial repayment is due or in advance.。

counterparty：1、Financing Shenzhen Yixin Financial Leasing Co., Ltd. Shenzhen Yixin Financial Leasing Co., Ltd. was established in August 2014，With a registered capital of US$560 million, it is a car financing leasing company specializing in providing one-stop car rental, sale and purchase financial services.，Currently the largest third-party auto finance company in China。

Headquartered in Shenzhen，Currently, 45 branches have been established，Business covers 31 provinces、300multiple cities，Establish cooperative relationships with more than 700 dealers。As of the end of March 2025，Yixin Leasing total assets

1. 81billion，net worth
2. 28billion，Main body rating AA。
3. Guarantee Xinche Investment (Shenzhen) Co., Ltd. Xinche Investment (Shenzhen) Co., Ltd.，Yiche、Tencent、Jingdong、Baidu, a company led by four Internet giants, invested heavily in building，Established in January 2025，With a registered capital of US$1 billion, it is the leading wholly foreign-owned enterprise in China that integrates the Internet and automobile finance.。
4. The overall evaluation of Yixin Group is based on Bitauto’s financial report data for the first quarter of 2025.，Bitauto Group’s revenue is
5. 50billion，in，Revenue from transaction services was
6. 26billion，Compared with the same period last year
7. 13billion yuan growth
8. 5%，This growth was mainly driven by the surge in transaction services。By automobile business，Revenue from new vehicle business was
9. 12billion，Revenue from the used car business is
10. 14billion。

project

Advantages

：①The project party’s shareholders have strong backgrounds，And in car information service、trade、In-depth layout in finance and other related automotive fields，The synergy effect is obvious。Yixin Financial Leasing Co., Ltd. has strong shareholder background，Tencent、Baidu、JD.com and other strategic investors have formed an investment consortium to invest US$560 million in Yixin Capital Co., Ltd., the parent company of Yixin Leasing.，Currently preparing for a new round of strategic investor capital increase and Hong Kong IPO and other matters。

Yixin Leasing’s largest shareholder on a consolidated basis is Tencent，The actual operator and founder is Bitche，Yixin Capital Hong Kong Co., Ltd. is its wholly-owned subsidiary。Bitauto IPOed on the New York Stock Exchange in 2010 and was the first (overseas) automotive Internet company to be listed.。② Fully closed operation，The risk control level is higher than the priority level of public offering ABS。

This project adopts a priority arrangement、Shareholder credit enhancement、Fund supervision、Debt pledge、Risk control measures such as review of qualifications of assets entering the pool，And the project is closed for operation throughout the entire process，From disbursing funds to forming loans to ABS payment, a complete closed loop is formed.。③Connect with ABS mature model，Clear exit path。

Yixin currently has issued exchange ABS scale

1. 04billion，The scale of insurance ABS is 1 billion yuan，Private ABS scale
2. 22billion，total
3. 26billion。④Short term，High expected returns。The maximum duration of each phase of this project shall not exceed 4 months，Meet investors’ short-term asset allocation needs。⑤Car loan assets are highly secure。

Currently, home loans and car loans are the two most high-quality assets among consumer loans.，From dispersion、default rate、loss rate、cash flow stability、Multi-dimensional assessment such as car recovery and disposal，Car loan assets are among the safest asset classes。Risk control measures：①Layering mechanism：Designed with priority、secondary arrangements，Ratio is 5：1，Subordinated shares provide credit enhancement to senior investors。

②Guarantee guarantee：Xinche Investment (Shenzhen) Co., Ltd., the major shareholder of Yixin Leasing, provided guarantee for this financing.。③Registration of debt pledge：Yixin Leasing issues loans/lease payments to consumers/lessees and pledges the creditor's rights to our company，Subsequently, the pledge will be released after ABS is approved for issuance.，After the ABS is successfully issued, the principal and interest of our company will be repaid。

④Establish a supervision account：Our company retains U-Shield and online banking management rights，Conduct closed supervision on the use of funds issued by the trust (which can only be used to form ABS underlying assets) and the use of funds returned from underlying assets。⑤Repayment：Our company signed a memorandum of cooperation agreement with Zhongtai Securities，It is agreed that Zhongtai Securities will package and issue the underlying assets in ABS，ABS repayments go into our company's custody account，Targeted repayment of all principal and interest of our company for the current period。

⑥ Review of qualifications for lending and forming assets：Before borrowing、Post-loan review，Ensure underlying asset quality。⑦After the loan is issued, the financier shall provide documents such as fund use report。Source of repayment：[First source of repayment]：ABS repayment Yixin Leasing needs to securitize the company's lease payments/car loans，Use raised ABS funds to repay trust loans，Pay trust loan principal and interest，Implement trust plan exit。

[Second source of repayment]：Debt collection Yixin Leasing will repay the trust loan with the debt collection formed by the car loan company，Implement trust plan exit。

1. Features of Pre-ABS PRE-ABS business is based on the whole process of ABS business. PRE-ABS business is a financing behavior based on the premise of subsequent issuance of ABS.，Funds raised by the trust company are invested in the original equity holders，The original equity holder expands its business after obtaining financing，Increase underlying assets；After the basic assets reach a certain scale,，Trust company serves as SPV，Raise funds from public or private markets by securitizing underlying assets，Obtain funds to repay the financing of the PRE-ABS link。

therefore，PRE-ABS business is essentially a financing business that uses the cash flow of underlying assets and the funds raised from the future issuance of ABS as the source of repayment.，Equivalent to a bridge financing before the issuance of ABS，Can be used to create more basic assets，It can also be used to smooth the cash flow during the ABS issuance period.。

PRE-ABS business has comprehensive cost

Advantages

The business of PRE-ABS comes from the financing needs of the original equity holders to expand their business scale.，Through a combination of PRE-ABS financing and subsequent ABS issuance，On the one hand, obtain funds to expand business，Expand the scale of basic assets；On the other hand, it is beneficial to smooth the cash flow before the issuance of ABS.，Revitalize existing assets。

Since the financing cost of issuing ABS is relatively low，Although PRE-ABS financing costs are higher，But the actual time the funds are occupied will not be too long.，Front-end deadlines are often within 1 year，For financiers，After obtaining low-cost ABS funds, you can replace the original trust financing，This combination is also relatively low cost，Less pressure on cash flow than simply issuing ABS，It is also more conducive to promoting business development。

PRE-ABS business is conducive to risk control for trust companies，Because the spread between the return rate of the front-end underlying assets and the cost of the end-end ABS is large enough，Flexible for deadlines、Trust financing with moderate financing costs provides business opportunities；Able to lock in counterparties through PRE-ABS business，Trust companies participate in the formation of underlying assets throughout the process、Establishment of special purpose vehicle and issuance of ABS，Income can be earned in both front-end PRE-ABS and back-end ABS，Conducive to establishing in-depth cooperation with customers，It also helps to control risks。

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