What is the financing mode of China Merchants Bank?

Cmbs financing mode is an innovative financing mode. It is the original owner who obtains funds by mortgaging real estate assets, and cancels the mortgage after the loan is repaid at maturity. The original owner retains the ownership of real estate assets and fully enjoys the bonus of real estate appreciation during the mortgage period.

The price of CMBS is determined according to the rating of rating agencies. After referring to the rating, the investment bank determines the final issue price and issues it to investors. The sales income of CMBS will be returned to the original owner of the real estate to repay the principal and interest of the loan, and the surplus will be used as the working capital of the company.

Advantages and risks of CMBS

Hans Williamson, director of CMBS research at Buckley Capital in London, said that in the past, borrowers were unlikely to look for loans in the capital market because of their close and long-term cooperation with banks.

However, many people find that borrowing money from banks is not the most effective financing method. Jim Savisky, director of business development department of TreppLLC, said that securitization loans are having a huge impact on loan prices and conditions. Securitization provides a choice for European balance sheet lenders, and these securitization products are creating a very competitive loan environment.

Compared with other financing methods, CMBS has the advantages of low issue price, strong liquidity, diversified lenders, no recourse to the parent company, releasing the value of commercial real estate while maintaining future growth potential and off-balance sheet financing.