TrustsIt refers to the act of entrusting the property rights of the settlor to the trustee based on its trust in the trustee, and the trustee manages or disposes of it in its own name for the benefit of the beneficiary or for a specific purpose according to the wishes of the trustor.
What is a political trust?
As the name suggests, "political trust" is endorsed by ** faith, and the trust company cooperates with ** at all levels and its subordinate enterprises to raise funds through the issuance of trust products, and uses the funds to various ** projects based on infrastructure construction to obtain income. In order to ensure the effective realization of returns, ** and its subsidiaries will provide certain credit enhancement measures based on their own capabilities.
What are the characteristics of political trust trusts?
Backed by the credit endorsement of **
China's urban investment belief is backed by the best sovereign credit and endorsed by the best. It is inconceivable that the extreme risk of urban investment debt under China's system will lead to a lack of credit.
**The platform will not have a subjective willingness to default
*The platform will never subjectively default, and if any platform dares to postpone repayment, the entire region will be dragged down with financing difficulties. Some investors are worried that "borrowing new to repay the old" will accumulate default risks, but in fact, borrowing new to repay the old is not entirely negative, but due to the mismatch of capital arrangements.
There is ** to coordinate repayment
Once there is a problem with the platform, it will involve the vital interests of the company, and there will be an incentive to coordinate. If some small and medium-sized private enterprises go bankrupt and some state-owned enterprises default, it is the process of clearing the market, and there is no obligation to bail out. Historical experience tells us that once there is a problem with urban investment debt, there has never been a precedent of not taking rescue measures.
Low historical bad debt rate
Judging from the experience of more than 10 years of political credit practice, there are very few cases of redemption problems on the platform, and the scale of risk exposure is far lower than the bank's bad debt ratio. Even in 2018, when defaults in the bond market were concentrated, the risk of urban investment bonds was significantly lower than that of other types of bonds. A small number of platforms can properly resolve the breach of contract in a short period of time, giving investors a reasonable compensation and explanation.
Accountability for life
China implements a lifelong accountability system for local debts, which requires that no breach of contract or breach of contract be borne on the grounds of re-election or change of leadership, and that the default and breach of contract shall bear corresponding legal and economic responsibilities.
Flexible means of adjustment
* There are a total of 4 money bags: the general public budget, the ** budget, the state-owned capital operating budget and the social insurance ** budget, among them, the state-owned capital operating budget and the social insurance ** budget are used in a directional manner and cannot be moved. If the platform is short of money, there are two money bags, the public budget and the public budget, which can solve the debt problem of the platform as a whole, and in simple terms, it can issue bonds. Of course, the best platforms help each other, and they can also solve the platform debt problem well.