In 2008, in response to the international financial crisis, China proposed a 4 trillion plan to encourage local governments to set up city investment companies and increase infrastructure construction. The city investment company has developed rapidly and its work is in full swing.
By 20 10, the state began to pay attention to the local debt problem, and many local governments borrowed money from the city investment company and shouldered a lot of hidden debts. This may lead to systemic risks. Therefore, the state began to regulate the lending behavior of local financing platforms.
20 14 the State Council issued "Opinions on Strengthening Local Government Debt Management", which is the No.43 document we often hear from people in the securities industry. The publication of Circular 43 clarifies the responsibilities of the government and enterprises, and defines the boundaries of local government debts. The city investment company borrowed money and paid it back. The government stopped going for a ride. Since then, the credit of urban investment bonds and the credit of local governments have been separated due to policy requirements.
All urban investment debts are definitely not government debts, but the government can support them through subsidies and asset injection. The government's belief in urban investment bonds gradually disappeared, but it was related to the government to some extent.
Urban investment bonds can be financed in the market by issuing bonds, mainly in two ways: corporate bonds and corporate bonds.
As of 20 15, the issuers of corporate bonds are limited to listed companies, listed companies or securities companies. Therefore, city investment companies can only issue corporate bonds to raise funds. After 20 15, the issuers of corporate bonds are extended to all corporate entities, and urban investment companies can also issue corporate bonds.
Corporate bonds The issuance of corporate bonds is managed by the National Development and Reform Commission and ultimately needs to be reviewed by the National Development and Reform Commission. Corporate bonds are managed by the CSRC and finally approved by the CSRC. Whether issuing corporate bonds or corporate bonds, city investment companies need to meet certain conditions. Only from the issue conditions, corporate bonds are slightly higher than corporate bonds.
Corporate bonds and issuance conditions of corporate bonds
I. Corporate Debt
Market companies, limited liability companies and other types of enterprises can issue corporate bonds, but they must meet certain conditions.
1. Net assets. More than 30 million yuan for joint-stock companies and more than 60 million yuan for limited liability companies and other enterprises. This condition is not difficult. Generally, enterprises that want to borrow money can meet this condition.
You must make profits continuously in the last three fiscal years. You can't lose a year in the middle.
The average net profit in the last three years must pay the interest on corporate debt for one year.
4. Enterprises with asset-liability ratio exceeding 85% cannot issue stocks. In actual business, it is generally required to be below 65%, and more than 65% needs to be guaranteed. Below 60% is the best situation.
5. Issuing corporate bonds requires corresponding projects. Corporate bonds are managed by the National Development and Reform Commission, which manages projects. In other words, what project should I borrow from the National Development and Reform Commission? You can't borrow money for no reason.
Second, the company debt
All corporate entities can issue corporate bonds. Public offering of corporate bonds can be divided into large-scale public offering and small-scale public offering.
1. Net assets. Same as corporate debt.
2. The average net profit in the last three years must pay the interest on corporate debt for one year.
3. The raised funds can be used uniformly within the scope of the issuer and its subsidiaries.
The requirements of large-scale public offering are very high, and the credit evaluation needs to reach AAA level. The issuer has not defaulted in the last three years, and the average annual income in the last three years can be distributed with bond interest 1 year. If it does not meet the conditions for large-scale public offering, it can only issue a small-scale public offering.
One more thing to note. In 20 12, the state began to draw up the list of urban investment platforms and standardize urban investment companies. A listed city investment company may not issue corporate bonds. Although it is not on the list, the government accounts for more than 50% of the income. The debt of the issuing company is limited, and it can only issue the debt of the provincial-level affordable housing company, or borrow the debt of the old company from the new, and the project proceeds from the debt of the company.