Special Refinancing Bonds Issued To Repay Arrears, Non-standard Debts At Discounts

The issuance of special refinancing bonds by 29 provincial governments has reached CNY1.37 billion as of Wednesday. The bonds are mainly used to repay arrears, high-interest non-standard debts and bonds raised by local government financing vehicles (LGFVs). Many creditors have accepted repayment plans with discounts, as most arrears and non-standard products have been in arrears for some time. About 77 LGFV bonds totalling CNY37.8 billion have been redeemed in advance since October, according to Tianfeng Securities. The market believes some of the special refinancing bonds are used to redeem the transactions, as local governments won’t be able to do so without incremental funds. (Source: 21st Century Business Herald)