On December 28, 2021, China Technology Exchange-ZGC Sci-tech Guarantee- Phase I of Yangtze River IP Asset Backed Special Program, Beijing’s first IP asset securities backed by patent licensing, was issued successfully.   

The bonds, with a rating of AAAsf and a total amount of￥337 million, will benefit 15 technology-based startups, such as HeroopSys, TIPS technology, ANDY technology and NANOMED Sinkcare and etc. Among them, the one-year bonds’ interest rate is 3.9% and the three-year bonds’ 4.4%, further reducing the comprehensive financing cost of enterprises.

As a credit enhancement agency, ZGC Sci-tech Guarantee Company, a member of the ZGC Development Group, provides guarantee services for this IP ABS in two aspects: special plans and basic assets. 

Intellectual properties are precious assets of technology firms, reflecting their technological innovation capabilities. In traditional processes of equity and debt financing, however, it is difficult to identify, evaluate, trade and capitalize IP rights due to their own characteristics and a lack of supporting policies.

Considering the challenges, such as high entrepreneurial risk, large share of intangible assets, long transformation cycle of sci-tech achievements, high cost of information access, and a lack of interdisciplinary sci-tech financial talents, faced by SMEs, the program has broken through the existing model and realized innovation in terms of basic assets, transaction, guarantee and credit enhancement modes.    

Based on the existing IP financing guarantee products of ZGC Sci-tech Guarantee Company, the product further explores the IP value of technology-based firms in Beijing, innovates the financing methods for SMEs, effectively enables the financing function of intangible assets, filling the gap of securitization products with patents as underlying assets in Beijing.