China had sold around 2.63 trillion yuan worth of local government bonds this year till October 20. Among the 2.63 trillion bonds, new bonds amounted to 475.577 billion yuan, taking up 61 percent of the scheduled quota for the whole year, while bonds issued to replace existing debts reached 2.15 trillion yuan, accounting for 67 percent of this year's quota.
According to Chinese Finance Minister Lou Jiwei's earlier statement, China's Ministry of Finance (MOF) gave local governments 3.2 trillion yuan quota to replace their existing debts with new bonds this year and at the same time, new local government bonds worth 600 billion yuan were also approved for the year of 2015. Li Yunfei, a fixed-income analyst of Minsheng Securities, noted that approximately 177.4 billion yuan worth of local government bonds are due this year, which will bring the total scale of Chinese local government bonds issuance to 3.9974 trillion yuan.
As a result, another 1.35 trillion yuan of local government bonds are to be issued this year. Minsheng Securities pointed out that as the auction yields of local government bonds have gradually edged up, commercial banks might be more willing to buy local government bonds in the future.
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