China Development Bank issues $1.3b ABS

China Development Bank (CDB) sold US$1.3 billion (RMB8 billion) worth of asset-backed securities to the state railway operator on Monday, Reuters reported. This move is viewed as part of the government’s efforts to develop the asset securitization market. CDB, one of three Chinese policy lenders that support government-backed projects, conducted the deal under an ABS trial launched in 2005. The government announced in August that it would aggressively expand the pilot program. Regulators have not yet officially announced new ABS quotas, but market participants expect them to grant US$49 billion to US$65.6 billion in quotas in the coming years.