SHANGHAI: China's Shanghai city government auctioned a total of 12.6 billion yuan ($2.06 billion) of five-, seven- and 10-year municipal bonds at yields of 4.01 percent, 4.22 percent and 4.33 percent, respectively, traders said on Thursday.
It is the ninth time this year that a Chinese local government has issued bonds directly, without the Finance Ministry acting as a proxy.
China announced in May that it would allow local governments to issue US-style municipal bonds for the first time in an experiment to straighten out its messy state budget, and start the clean-up of its massive local-government debt problem.
The finance ministry granted 10 local governments a combined quota of 109.2 billion yuan to issue such bonds. A slowdown in the economy has added to stress on state-owned firms with large debts to repay.
A senior finance ministry official said in June the pressure on local governments to repay their $3 trillion debt is the greatest this year when a fifth of their loans are due.
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