Ministry of Finance, Measures for the 2014 Pilot Project for the Autonomous Issuance and Repayment of Local Government Bonds
财政部2014年地方政府债券自发自还试点办法
July 15, 2014 | BY
clpstaff &clp articles &Local governments allowed to issue their own bonds.
Issued: May 19 2014
Effective: as of date of issuance
Main contents: Following approval by the State Council, Shanghai, Zhejiang, Guangdong, Shenzhen, Jiangsu, Shandong, Beijing, Jiangxi, Ningxia and Qingdao will launch the pilot project for the autonomous issuance and repayment of local government bonds in 2014.
The term “autonomous issuance and repayment” means the mechanism whereby a pilot area itself arranges for the issuance of local government bonds, payment of coupons and repayment of the principle within the debt issuance limit approved by the State Council (Article 2).
The total quantity of bonds issued in a year may not exceed the debt issuance limit for the year approved by the State Council. The debt issuance limit may not be carried over to the following year (Article 3).
The government bonds issued by pilot areas shall be book-entry bonds with fixed coupon rates. 2014 government bonds shall have terms of 5, 7 and 10 years with a structure ratio of 4:3:3 (Article 4).
The pilot areas shall employ the offer coupon rate for newly issued treasury bonds of an equivalent term and market interest rates as their pricing benchmarks. Where the underwriting method is opted for, the bond underwriting interest rate (or interest rate range) shall be determined in consultations with the lead underwriter, each underwriter (including the lead underwriter) shall be required to submit a bond underwriting amount (or underwriting interest rate and underwriting amount) by the specified time, and the bond offer coupon rate and bond underwriting amounts of all the underwriters shall be determined based on market principles. Where the bid invitation method is opted for, the underwriters shall be required to submit their bond bid amounts and bid interest rates by the specified time, and the bond offer coupon rate and the bond winning amounts of all the underwriters shall be determined based on the principle of lowest to highest interest rate (Article 13).
The maximum underwriting limit/maximum bid limit of any single member of an underwriting syndicate may not exceed 30% of the bond offer amount/bid invitation amount of each bond offer (Article 14).
clp reference:3510/14.05.19 issued:2014-05-19 effective:2014-05-19This premium content is reserved for
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