China Merchants Securities
RMBS is the largest asset class in the onshore China securitization market, thanks to the consistent deal flow and the benchmark size of many transactions. The steady volumes have led to quite a standardized market, but this year China Merchants Securities proved that innovation is still possible.
The firm is the indisputable leader in RMBS, having ranked number one for RMBS underwriting volumes for three consecutive years since 2015, as well as 2018 year-to-date. CMS, during our awards period, underwrote 28 transactions worth Rmb104.8 billion ($15.2 billion), taking almost 23.7% of market share, according to Wind.
It has been the go-to firm for the biggest RMBS originators, from state-owned names such as China Construction Bank, Industrial and Commercial Bank of China and Bank of China, to commercial lenders China Merchants Bank and Industrial Bank.
CMS was also very much involved in the opening up of the RMBS sector following the launch of Bond Connect, acting as the lead underwriter for landmark trades such as CCB’s Jianyuan 2018-2, which was the first-ever Chinese RMBS transaction sold through Bond Connect, and Jianyuan 2018-11.
Its unbreakable relationship with CCB, the single largest originator for the asset class, was a testimony to CMS’s market-leading practice.
CMS has not just performed well day-to-day, but has also made long-term investments in the market. Noting that China’s securitization products had always lacked secondary market liquidity, since October 2017, CMS has been underwriting a number of credit ABS deals that provide a two-way market on every trading day, including Jianyuan 2017-5 and Jianyuan 2018-11 RMBS. Jianyuan 2017-5, sold in October 2017, was the first RMBS to include a market-making mechanism.