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PRINT(Beijing) – China’s local government financing platform companies are making a comeback in the bonds market, but experts say the best way to let local governments raise funds is to let them directly issue bonds.
In the first half of the year, more than 60 platform companies have issued enterprise bonds, raising a combined roughly 165 billion yuan, data from the National Development and Reform Commission (NDRC) shows.
This is in sharp contrast to the second half of last year, when bond issuance by platform companies was almost frozen by regulators amid mounting investor concerns about some local governments’ ability to repay their debts. Also implemented last year were a series of measures designed to narrow the range of platform companies that are eligible for bond issuance.
These restrictions have been relaxed a bit as the economy continues to cool. The NDRC, for example, is mulling adding more platform companies to its review list for bond issuance, a source close to the regulator said. Platform companies on the authorities’ watch list may also be allowed to issue bonds conditionally, he said.
The NDRC has more than 30 platform companies waiting for its approval to issue bonds worth more than 200 billion yuan, he said.
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