China's National Association of Financial Market Institutional Investors (NAFMII) is mulling to loosen the requirements on issuance of super and short-term commercial papers (SCP) by non-financial enterprises, reported www.xinhuanet.com Tuesday.
As the report held, the move was one of the two key changes in the recently revised interbank non-financial enterprise bond registration and issuance rules of NAFMII, an interbank market self-discipline organization and registration authority for many popular bond products. Under the new rules, NAFMII also planned to apply classified management to issuers of NAFMII-registered bond products.
As industry experts noted, NAFMII's planned restriction easing of SCP issuance meant allowing enterprises with poor credit conditions to float SCPs while the classified bond issuer management pointed to canceling quota restriction over bond issuance by companies with high credit conditions, both of which were good for boosting enterprises' direct financing and short-term liquidity risk reduction. NAFMII's these efforts represented thorough simplification of related bond issuance registration procedures and a bond issuer with mature information disclosure practices and high investor acceptance would enjoy convenient bond issuance registration, said a source close to NAFMII.
Prior to this, potential issuers of SCP, commercial papers and mid-term notes needed to register with the NAFMII issuance of these products separately. But the new rules were expected to permit qualified issuers to conduct packed registration for the three products after registering a DFI qualification. For perpetual notes, asset-backed notes and M&A bonds, separated registration would still prevail. What's more, registered SCP issuers could float according to their will SCPs by batches within the valid registration period, likely to boost SCP issues and squeeze commercial paper issues in the future.
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