Inventory quantity of debt financing instruments approaches RMB9 trln

It is learnt from the National Association of Financial Market Institutional Investors (NAFMII) that the inventory quantity of various debt financing instruments across the country has approached 9 trillion yuan. The new bond financing in Beijing, Tianjin and Hebei province amounted to 30 percent of total social financing in the first three quarters this year, up by 7.2 percent when compared with that in late 2013 and 15 percentage points higher than national average.

Statistics show that the interbank market strongly supports the real enterprises in Beijing, Tianjin and Hebei province to raise funds through issuing bonds. Various enterprises of these regions have issued debt financing instruments valued at more than 450 billion yuan since the beginning of this year. As of the end of November, the inventory quantity of debt financing instruments in these regions recorded one trillion yuan or so, taking up 12 percent of that in the whole country and two percentage points higher than the proportion of the three regions’ GDP in national GDP. 

The People’s Bank of China (PBOC) released on its website last Friday that the PBOC and the National Development and Research Commission convened a conference on Dec. 10 afternoon to provide financial support to the coordinated development of Beijing, Tianjin and Hebei province. During the conference, they proposed to improve the quality and efficiency of financial service, orderly relieve the non-capital functions of Beijing, and especially continue to strengthen the financial supports in three major fields including traffic integration, ecological environmental protection and industrial upgrading and transformation, which have achieved breakthroughs already. 

The fundraising in the interbank market of Beijing, Tianjin and Hebei province focuses on major fields. In terms of traffic integration, six companies including Capital Airport Holding Company, Tianjin Railway Construction Investment Holding Company and Hebei Transportation Investment Group Corporation have issued about 15 billion yuan of debt financing instruments since 2015, providing financial support to build a unified and open regional transport system.

In terms of industrial transfer and connection, Shougang Corporation—the model of the coordinated development and industrial transfer of Beijing, Tianjin and Hebei province, has issued altogether 46 billion yuan of debt financing instruments on interbank market since 2013. Six enterprises, including Tianjin Bohai State-owned Assets Management Co., Ltd, have registered 5.5 billion yuan of M&A notes in interbank market for the purpose of M&A and reorganization.

Meanwhile, Shenhua Group, Xinxing Ductile Iron Pipes Co., Ltd. (000778.SZ), Hebei Iron And Steel Co., Ltd. (000709.SZ), which are companies located in Beijing, Tianjin and Hebei province, have also raised funds through debt financing for technologic upgrading and equipment replacement and upgrading.

As to ecological environmental protection, several enterprises engaged in new energy including Beijing Jingneng Clean Energy Co., Ltd. and China Longyuan Power Group Corporation Limited issue debt financing instruments in the inter-bank market to ease the pressure on the energy supply and environmental carrying capacity of Beijing, Tianjin and Hebei province. The NAFMII indicates that the inter-bank bond market will support the coordinated development of Beijing, Tianjin and Hebei province as usual and actively explore diversified, normalized and pertinent financial supporting measures.