Bonds Jun 16

NDRC opens floodgates for corporate bonds  

Corporate bond issuance has changed from approvals to a registration system and 497 bn yuan ($70 billion) of bonds had been approved or registered by June 12, spokeswoman tells media

by Chris Gill
 NDRC opens floodgates for corporate bonds
File photo: NDRC

(ATF) The National Development and Reform Commission (NDRC) held a press conference on Tuesday June 16 at which spokeswoman Meng Wei said that corporate bond issuance has changed from an approval system to a registration system.

Corporate bond issuance is “reborn”, the China Securities Journal said, lauding the reform, which puts information disclosure at the center. It said the move would increase marketisation and legalisation, plus guidance, and further strengthen the bond market.

Meng Wei said that over the past three months, joint efforts from all parties helped this reform advance steadily, by actively supporting various types of qualified enterprises to use corporate bonds for financing.

The NDRC had accelerated the organisation and implementation of bond issuance, enhancing the ability of corporate bonds to serve the real economy, he said. As of June 12, some 496.96 billion yuan of corporate bonds had been approved or registered, and 193.03 billion yuan had been issued, which was an increase of 38% and 38.9% respectively over the same period last year.

The efficiency of the registration and issuance of corporate bonds was further improved, and the reform dividend had been positive.

'Green channel'

She said that during this period, the National Development and Reform Commission had opened a "green channel" for newly declared bonds for companies heavily affected by the coronavirus epidemic and key safeguards for epidemic prevention and control.

As of June 12, some 76 corporate bonds worth 94.57 billion yuan were accepted through the "green channel". Innovative support methods and simplified procedures helped the approval or registration of 15 corporate bonds from the Hubei region, where the pandemic started. That had accelerated the process to raise 17.12 billion yuan.

At the same time, the National Development and Reform Commission maximised the simplification of the procedures for convenient bond issuance and supported companies by helping to reduce comprehensive financing costs. The bond funds would be used to help resume production at companies and workplaces.

The NDRC  also announced approval of investment projects – in May a total of seven fixed asset investment projects with a total investment of 129.8 billion yuan, mainly concentrated in transportation, energy and other fields, got the green light.

The NDRC’s next job will be to implement the "Government Work Report" – to arrange the deployment and pay close attention to the release of the central budget investment plan, to promote as much employment on these huge state projects as possible, and expand “effective investment”.

ALSO READ: Shutters lift on China's housing market