Bonds News
- CSRC issues rules on corporate bond market
Date: 16-Aug-2007 Sources: (Shenzhen Daily)
THE national stock regulator has published new rules making it easier for listed companies to issue debt, potentially providing a lift for China's inactive corporate bond market.
Qualifi ed companies will now be allowed to issue corporate bonds with a maturity of more than one year without bank guarantees, the China Securities Regulatory Commission (CSRC) said in a statement on its Web site late Tuesday.
The proceeds can be used for any general corporate purpose approved by its shareholders, but must conform with the government's macroeconomic policies, the commission said.
Previously, all corporate bonds had to be guaranteed by banks, and the proceeds could only be used for projects specifi cally approved by the government.
Companies have long complained that the National Development and Reform Commission has made corporate bond issues diffi cult, and as a result the corporate bond market has been largely inactive.
The stock regulator, which now has the power to approve debt sales by publicly tradedcompanies, wants to widen companies' fi nancing channels.
The regulator said that qualifi ed companies can apply for authorization for an overall bond issue and then issue debt in several tranches under that approved amount.
The fi rst tranche of any such issue, which should account for at least 50 percent of the total, should be made within six months after receiving approval.
The remainder should be issued within 24 months, the securities regulator said. Bonds to be sold by Chinese companies in accordance with the new rules will carry a face value of 100 yuan, with maturities of more than one year. The price should be decided by the company and the underwriter after gauging investor demand for the securities, according to the rules.
Sponsor Results:
