(Yicai Global) Sept. 9 -- The Shanghai Stock Exchange has listed the city's first group of securities that are based on intellectual property to help small- and medium-sized enterprises lower their borrowing costs.

Pudong Sci-Tech Innovation Group listed two batches of IP asset-backed securities, totaling CNY105 million (USD15.3 million), on the SSE. The securities involve 17 SMEs with over 100 patents. The state-owned company is looking to further issue CNY900 million in IP ABS.

IP ABS is similar to bonds, said Zhang Yongzhong, deputy director of the Shanghai Intellectual Property Administration. Banks will sell the assets as fixed-income wealth management products to investors while the patent-holders are expected to have future income due to their IP. But if they default, the loan will be guaranteed by Pudong Sci-Tech Innovation Group, he added.

The pioneering program is based on invention patents' exclusive licensing fees instead of owning the IP, the issuer's Chairman Fu Hongyan said at the listing ceremony.

In the first half of this year, the SIPA handled nearly 60 IP pledge financing projects, involving more than 720 patents and trademarks, according to data from the National Bureau of Statistics. The scale of funding reached CNY3.1 billion (USD452.5 million), exceeding that of a year ago.

Editor: Emmi Laine