Credit Enhancement Research in Asset Securitization

Asset backed securitization is a financial technique that consolidates various assets, such as loans, collateral, and credit card receivables, into securities that can be traded. This process converts assets that were previously difficult to sell into easily tradable financial instruments. Credit enhancement plays a crucial role in the asset securitization process, aiming to raise the credit rating of securitized assets, mitigate investment risks, and attract a larger pool of investors. Hangcheng is an intellectual property service company situated in Hangzhou, Zhejiang Province. It specializes in offering consumers intellectual property services related to patents, trademarks, copyrights, and other related areas. Hangcheng intends to issue the initial phase of micro enterprise loan asset-backed securities (ABS) in 2024 to generate cash for the purpose of supporting the company's commercial growth. This paper will examine ways to improve credit through the method of literary analysis and take Hangcheng as a case study.