RS MACALLINE (01528.HK) announced on July 31 a plan to establish a commercial mortgage-backed asset-backed securities (ABS) program to optimize its capital structure.
To better unlock existing assets, boost operational cash flow, diversify funding channels, and support business growth, the company's subsidiary, Shanghai Shanshan Art Furniture, will use its owned properties as underlying assets. RS MACALLINE’s asset management arm will serve as the original equity holder, with Industrial Securities Asset Management as the manager. The program aims to raise funds by issuing asset-backed securities to investors, and the company will subscribe to the subordinated tranches.
Credit enhancement measures include underlying asset mortgages, accounts receivable pledges, shortfall payment commitments, resale arrangements, and self-subscription of subordinated securities. The total issuance size is capped at 2.4 billion yuan, with a maximum term of 18 years. Proceeds will be used for lawful and policy-compliant expenditures, such as repaying existing liabilities tied to the underlying assets and supplementing working capital. After establishment, the securities will trade on the stock exchange.
The ABS program will issue senior and subordinated securities, totaling no more than 2.4 billion yuan. Senior securities will account for up to 2.34 billion yuan, while subordinated securities, to be subscribed by the company, will be up to 0.6 billion yuan. The proportion of senior to subordinated securities may be adjusted based on regulatory requirements, market conditions, investor demand, or other factors. Principal and expected returns on senior securities will be prioritized over subordinated securities.
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