I'm in the county town, and you say I'm a big shot?

Chapter 772: ABS's 'nested doll' model is activated, instantly amplifying the leverage dozens of times.

Today, Lin Wei changed out of her usual gray business suit and wore a dark blue shirt dress, which made her look less sharp in the workplace and more feminine.

"Please come in."

Fang Qingye stepped aside to let Lin Wei in, then gently closed the door behind her.

Lin Wei walked into the suite's reception area with a cup of coffee, her tone relaxed: "Your two subordinates should have finished reporting their work by now, right?"

"What, is President Lin still monitoring my movements?" Fang Qingye replied half-jokingly.

"Is this necessary?" Lin Wei glanced at him. "You rushed here from Jinghai, how could they not report the situation to you immediately?"

Fang Qingye did not answer, but smiled slightly and invited Lin Wei to sit down on the sofa.

"I was just out for a stroll tonight and wanted to hear about your plans for the future," Lin Wei said, taking an elegant sip of her coffee.

"I plan to host a banquet for Mayor Wang and his delegation tomorrow night, and I would also like to invite you to attend. I was originally going to let you know tomorrow morning, but since you're here, I'll extend the invitation in person."

“No problem.” Lin Wei readily agreed, then changed the subject, “However, according to my information, Yongjiang has already made substantive contact with Niu Zhuang, CEO of Hengtai Securities, so you need to hurry.”

Fang Qingye understood her underlying meaning: if they wanted to reverse the current passive situation, simply hosting a banquet was far from enough.

Instead of responding directly, he picked up his teacup, took a sip, and suddenly asked, "Mr. Lin, how much do you know about Hengtai Securities?"

"What I know is probably about the same as what you have, all of it is publicly disclosed information," Lin Wei replied with a smile.

Fang Qingye always felt that she wasn't telling the truth.

But didn't you tell me everything?

But he didn't want to dwell on the issue, so he asked in a puzzled tone, "We were having a smooth discussion with Yongjiang, so why did Hengtai Securities suddenly jump in? After all, Yongjiang City Investment's bond issuance hasn't been made public yet."

"I can answer this question. According to our understanding, there are people in the securities industry who have close ties with a certain leader in Yongjiang City and are acting as intermediaries."

"Who is it? What is their relationship with Hengtai Securities?" Fang Qingye immediately pressed.

"I have no comment on that."

"President Lin is still wary of Jinghai Bank, even though we're now comrades in arms," ​​Fang Qingye said, half-jokingly and half-seriously.

"Isn't Director Fang the same?" Lin Wei looked at him with a half-smile. "Alright, let's stop here for tonight. If you have any valuable information, we can exchange it then?"

After saying that, Lin Wei stood up and gave Fang Qingye a playful smile: "I'm going to rest now, goodnight."

"Good night."

After seeing Lin Wei off, Fang Qingye closed the door and stood by the window again, gazing at the night view and lost in thought.

Although Yang Ming from the Data Management and Analysis Department won't be able to provide the official report until tomorrow morning, Fang Qingye has already concluded:
Among the major shareholders of Hengtai Securities, apart from Xicheng State-owned Assets Supervision and Administration Commission, the other shareholders must be related. In fact, Hengtai Securities has been controlled by the Mintian Group through a majority stake. Xicheng State-owned Assets Supervision and Administration Commission is only the nominal largest shareholder.

What Yang Ming needs to do is produce solid evidence.

If Hengtai Securities is indeed under the actual control of the Mintian Group, given the Mintian Group's nature and Hengtai Securities' current operating conditions, this fund is very likely to be used as "bridge financing," and it is very likely to be used for operating ABS!

ABS, or asset-backed securities, refers to financial instruments that transform assets lacking immediate liquidity but with predictable and stable cash flows into securities that can be freely traded in financial markets through structural restructuring and credit enhancement.

In other words, if Hengtai Securities acquires these 10 billion yuan in bonds, it will not simply hold them to collect interest. Instead, it will repackage and resell them through structural restructuring. Once the "nested" structure of ABS is activated, the leverage can be magnified several times or even dozens of times instantly!
Fang Qingye calmed herself down and continued her deduction: If Hengtai Securities wanted to operate an ABS (Asset-Backed Securities), it must secretly plan ahead before purchasing the bonds, assembling a professional team to ensure that the ABS project could be launched as quickly as possible after the bonds were acquired, avoiding any unforeseen complications. This team would need to include:
ABS program manager and underwriter

Custodian Bank
Rating agencies and law firms
Underwriters?
Custodian bank?
Suddenly, Fang Qingye had a flash of inspiration, and a slight smile appeared on her face.

He had already figured out a way to break the deadlock.

OK! Time for a shower and bed!

The next morning, after getting up, Fang Qingye invited Yue Kai, Zhou Yu, and all members of the negotiation team to have lunch on the third floor of the hotel.

Lin Wei and her team were also at the restaurant, and the two sides exchanged polite greetings. While they were eating, Fang Qingye's phone rang with a WeChat notification. She opened it and saw that it was a report sent by Yang Ming.

As expected:
Among the top ten shareholders of Hengtai Securities, apart from Mintian Holdings, Huazi Industry, Zhongchang Hengyuan, and Shencheng Yida are all affiliated companies of Mintian Group, with a combined shareholding ratio of up to 50.2%—absolute control!
Ha ha
Fang Qingye smiled, and Chen Danlu, who was sitting at the same table, had obviously received a similar message. The two looked at each other and smiled.

This subtle expression was inadvertently caught by Lin Wei, who was sitting next to her.

After breakfast, Chen Danlu and Qian Duo immediately went to Fang Qingye's suite to discuss the matter.

"As expected, it's absolutely controlled by Mintian Group!" Qian Duo spoke as quickly as ever. "Based on our analysis yesterday, given Hengtai Securities' current situation, their proactive acquisition of 10 billion yuan in corporate bonds is definitely not for long-term holding; it's definitely for use as bridge financing, packaged and sold. The most likely way is through an ABS (Asset-Backed Securities) operation!"

“That’s right,” Chen Danlu added. “If we go even further and adopt the ‘nested doll’ model of ABS, the leverage can be magnified several times or even dozens of times in an instant!”

“If that’s the case, the Yongjiang government is only providing credit risk for 10 billion yuan of bonds, but through complex financial engineering, they could potentially amplify it to a scale of tens of billions!” Qian Duo became more and more excited as she spoke, and her speech became faster and faster.

"My God, if that's true, it's like providing one pound of explosives (the credit risk of a billion-dollar bond), but through complex financial engineering, binding it with the equivalent of 100 pounds!"

"When it explodes, it won't just be them who get hurt. All the banks and trusts that bought ABS, all the institutions involved in this chain, will be torn to shreds! My God, Hengtai Securities can't be that audacious, can they?"

In the end, even Qian Huanlian himself began to doubt it.

Definitely!

However, Fang Qingye did not rush to conclusions but said, "Let's not discuss the leverage ratio for now. Our primary task is to obtain real information about this ABS project—after all, this is just our speculation at the moment."

“Hengtai Securities would never have disclosed this information voluntarily, and the Yongjiang government certainly doesn’t know the inside story either. Moreover, they won’t believe us without solid evidence, since words alone are not enough,” Fang Qingye concluded.

A brief silence fell over the room.

From a legal perspective, Hengtai Securities indeed had no obligation to disclose information. Once the bond issuance was completed, these bonds became Hengtai Securities' legal assets. As the asset holder, it had the right to dispose of these assets within the scope permitted by law, without needing the consent of the original issuer, Yongjiang City Investment.

This is similar to a new homeowner taking out a mortgage on a house after it has been sold, without needing to inform the original homeowner.

"We can start with the management structure of ABS projects," Chen Danlu suggested after a moment of thought.

"If Hengtai Securities wants to operate ABS, it must secretly assemble a professional team before purchasing the bonds. The purpose is to ensure that the ABS project can be launched immediately after the bonds are acquired, so as to avoid any unforeseen problems."

"In other words, the project manager, underwriter, custodian bank, rating agency, and law firm of this ABS project must know the inside story!" Qian Duo immediately realized.

“But how do we know which institutions Hengtai Securities will choose? Unless we have inside information at Hengtai Securities, but that’s obviously unrealistic.” Qian Duo sounded somewhat frustrated at the end.

Chen Danlu frowned, lost in thought. Suddenly, as if remembering something, he looked up at Fang Qingye: "Fang Xing, I remember you were also a director of Baoshang Bank?"

(End of this chapter)