China to support bond issuance by private firms as virus hurts economy

SHANGHAI, March 28 (Reuters) – China will soon roll out measures to make it easier for private companies to issue bonds, China’s securities regulator said late on Sunday, as a resurgence in coronavirus infections threatens an already slowing domestic economy.

The China Securities Regulatory Commission (CSRC) said private firms in high-tech and strategic emerging industries will be allowed to issue so-called technology and innovation corporate bonds.

In addition, more qualified private companies will be included in the name list of “mature” issuers to expedite their bond sales, while market participants are encouraged to provide credit enhancement tools for private issuers, the CSRC said in a statement.

Other measures include making it easier for companies to borrow money using bonds issued by private firms as collateral, and improve disclosure by private issuers, the CSRC said.

China’s financial hub of Shanghai said on Sunday it would lock down the city in two stages to carry out COVID-19 testing over a nine-day period, after it reported a new daily record for asymptomatic infections.

The Shanghai Stock Exchange, which is supervised by the CSRC, said in a separate statement it would fast track approvals for corporate bonds to be issued by companies that are seriously affected by China’s virus outbreak.

The Shenzhen Stock Exchange will also broaden bond financing channels by private firms, having recently rolled out “digital economy” bonds that help companies to raise money to fund investment in digital infrastructure and technology, the Shanghai Securities News reported on Monday.

(Reporting by Samuel Shen and Andrew Galbraith; Editing by Jacqueline Wong)

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