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Sustainable Construction and Financing—Asset-Backed Securitization of Expressway’s Usufruct with Redeemable Rights

Author

Listed:
  • Qiming Zhang

    (School of Economics and Management, Beijing Jiaotong University, Beijing 100044, China)

  • Linda Yin-nor Tjia

    (Department of Asian and International Studies, City University of Hong Kong, Hongkong 999077, China)

  • Biyue Wang

    (Architecture and the Built Environment, Delft University of Technology, 2600 Delft, The Netherlands)

  • Aksel Ersoy

    (Architecture and the Built Environment, Delft University of Technology, 2600 Delft, The Netherlands)

Abstract

Asset-backed securitization will greatly promote the sustainability of infrastructure construction and financing. However, there are quite limited researches conducted in this field. Given the project characteristics of infrastructure project securities, this paper proposes the issuance steps of redeemable asset-backed notes (ABN) based on the infrastructure project’s usufruct as the basic asset. Taking the expressway franchise as an example, the issuing scale and coupon rate of the redeemable ABN are determined by the expected cash flow of the expressway, the term structure of random interest rates, and the option-adjusted spread (OAS). In addition, this research analyzes the duration, convexity, and OAS.

Suggested Citation

  • Qiming Zhang & Linda Yin-nor Tjia & Biyue Wang & Aksel Ersoy, 2021. "Sustainable Construction and Financing—Asset-Backed Securitization of Expressway’s Usufruct with Redeemable Rights," Sustainability, MDPI, vol. 13(16), pages 1-17, August.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:16:p:9113-:d:614434
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