China will quicken and simplify the way in companies in emerging industries can issue bonds, the country's economic planner said on Thursday, its latest attempt to help firms battling an economic slowdown. Firms in emerging sectors such as cloud computing, biotechnology and energy conservation can now raise funds more quickly by selling bonds, the National Development and Reform Commission said in a statement.
To give companies to more flexibility in their financing, firms can use up to half of the funds raised in bond sales to repay bank loans or replenish their working capital, the commission said.
Funds can also be used to finance mergers and acquisitions.
Local governments would also use their fiscal budgets to help companies, the statement said. State revenues can be used to pay for insurance and risk management plans. It was not clear whether these programmes will benefit bond sellers or buyers.
Some firms will also be allowed to issue income bonds as part of a national experiment. Unlike other bonds, income bonds pay a coupon only when the issuing firm earns enough income to finance the payments.
Hurt by an entrenched economic cooldown that has dented growth in sectors from trade to housing to manufacturing, China's economy is widely expected by analysts to slow to a 25-year low of around 7 percent this year.
China is set to release its first-quarter gross domestic product data next week, and analysts also expect economic growth to have slipped to 7 percent in the first three months.
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