China Securities Regulatory Commission, Measures for Pilot Projects for the Offering of Corporate Bonds

公司债券发行试点办法

October 02, 2007 | BY

clpstaff &clp articles &

Trusts introduced for offering of corporate bonds.

Clp Reference: 3700/07.08.14 Promulgated: 2007-08-14 Effective: 2007-08-14

Promulgated: August 14 2007
Effective: As of date of promulgation

Applicability: For the purposes of this Law, the term "corporate bonds" means negotiable securities offered by a company in accordance with the statutory procedure and that specify that the principal will be repaid and interest thereon paid within a period of at least one year (Article 2).

Main Contents: In order to offer corporate bonds, the following provisions shall be complied with:

(1) the company's production and operations comply with laws, administrative regulations, the company's articles of association and state industrial policy;

(2) the company's internal control systems are sound and the completeness, rationality and effectiveness thereof are free of any material defects;

(3) the credit grade of the bonds has been rated as good by a credit rating agency;

(4) the audited net assets of the company as at the end of the most recent period shall comply with laws, administrative regulations and relevant provisions of the China Securities Regulatory Commission;

(5) the average distributable profits realized during the most recent three financial years are not less than one year of coupon payment of the corporate bonds; and

(6) the aggregate balance of corporate bonds after the contemplated offering will not exceed 40% of net assets as at the end of the most recent period; the aggregate balance of corporate bonds of financial companies shall be calculated in accordance with the provisions on financial enterprises (Article 7).

The face value of each corporate bond shall be Rmb100. The offering price shall be determined by the offeror and sponsor through a market inquiry (Article 9).

The company shall engage a bond trustee for the bondholders and enter into a bond trust agreement. The bond trustee shall safeguard the interests of the bondholders in accordance with the provisions of the agreement during the life of the bonds (Article 23).

Related Legislation: PRC Company Law (Amended), Oct 27 2005, CLP 2005 No.10 p.21; and PRC Securities Law (Amended), Oct 27 2005, CLP 2006 No.1 p.31

Full Translation: See page 77

clp reference:3700/07.08.14prc reference:证监会令第 49 号promulgated:2007-08-14effective:2007-08-14

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