New | China’s top planning agency streamlines issuance of certain corporate bonds
National Development and Reform Commission simplifies approval procedures for high credit rating issuers
China’s top economic planner has taken a substantial step towards letting market forces play a role in corporate bond issuance, publishing a new guideline governing the approval procedure for companies’ debt sales.
The National Development and Reform Commission (NDRC) said on its website on Wednesday that issuers of bonds rated AA+ or higher can skip a second review process.
It also removed the quotas for AA issuers such as town-level governments and companies.
The new rule is aimed at facilitating local governments and companies’ fundraising activities amid a slowing economy and the leadership’s efforts to deepen a market-based reform in the finance sector.
“It is a move to make the bond issuance a market-driven system with the NDRC relinquishing part of its power in reviewing the applications,” said Gu Weiyong, Gu Weiyong, chief executive of Shanghai-based Ucon Investments. “The old rule did appear to be outdated and rigid.”