TheEdge
BEIJING: China's economic planning agency has approved the issuance of 99.5 billion renminbi (RM46.5 billion) in new bonds by non-listed firms, bringing the total quota for this year to almost 200 billion renminbi, state media reported on Wednesday.
While the new quotas granted by the National Development and Reform Commission (NDRC) mark a significant expansion from the 60.8 billion renminbi issued in all of last year, they still fall short of the 300 billion renminbi that state media has said the agency could approve this year.
The new quotas have been allocated mainly for the railways ministry and the State Grid Corp, the semi-official China Business News said.
The corporate bond market has been relatively slow to take off, in part because of requirements such as one that most longer-term bonds need to be guaranteed by banks - something only large companies can achieve.
But the NDRC said in March that it was encouraging more bonds without bank guarantees - the first such issues came to market last year - and that it would further simplify the administrative procedures.
The NDRC is responsible for approving bonds by non-listed firms with a tenor of more than a year, while the securities regulator recently obtained the power to mandate listed firms' issuance of bonds with a maturity of longer than one year.
The central bank oversees a separate corporate paper market, for debt of one year or less. - Reuters
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