China’s first trademark securitization scheme on November 10 made its market debut on the Shenzhen Stock Exchange Market through an IPO. The scheme was co-founded by Great Wall Capital Management Co., Ltd., Guotai Junan Securities Co., Ltd., and Guangzhou Science City.
The issuance quota of the scheme is set at 289 million yuan ($45 million). Science City (Guangzhou) Investment Group will provide credit enhancement service, with class A notes and the coupon rate set at 188 million yuan ($29 million) and 4.3% respectively, and class B notes and the coupon rate set at 87 million yuan ($14 million) and 4.9% respectively.
The foundational intellectual property assets of the scheme comprise 58 trademarks owned by 12 companies, whose business range from information technology, smart manufacturing, green energy, etc. These trademarks are valued at 390 million yuan ($61 million).
China is exploring pathways to enable corporations that have little or no tangible assets are able to obtain significant funding without selling a significant portion of the ownership of the corporation. One pathway is to offer security interests in intangible assets such as intellectual property in the form of patents, trademarks and copyrights. Asset securitization started in early 1980s in the US market.
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