PBOC to Toughen Corporate Bond Regulations: Journal

The PBOC issued a guideline to promote the high-quality development of corporate bonds on Wednesday, restricting excessive bond issuance by highly leveraged companies, strengthen the management of bond-raised funds and prohibit underwriters from using the third-party to subscribe for the bonds issued by itself, the China Securities Journal reported citing a document on PBOC website. Bond issuance should conform to the country's macroeconomic development and industrial policies, and match the needs of the real economy, the newspaper said. The guideline also urges to accelerate the reform of local government financing vehicles to prevent the spread of hidden debt risks, while local government must not raise debts via corporate bonds or provide guarantees or repaid corporates' maturing debts, the newspaper said.