China's Inner Mongolia and Qinghai plan bond issues to refinance debt www.reuters.com
China’s northern region of Inner Mongolia said on Tuesday it would issue more bonds to repay outstanding debt, while the northwestern province of Qinghai joined a growing number of local governments to issue such bonds as Beijing seeks to reduce debt risks in a wobbly economy.
Inner Mongolia said it would auction three batches of refinancing bonds next Tuesday totalling 40.4 billion yuan ($5.5 billion). It comes after the government raised 66.3 billion yuan by selling such bonds on Monday.
Separately, Qinghai will auction four batches of refinancing bonds next Tuesday totalling 17.2 billion yuan to repay existing debt, with maturities ranging from five to seven years, according to the sales prospectus.
At least seven local governments, which also include Guangxi and Yunan in southwest China, have disclosed plans to issue bonds for debt repayments this year. The proceeds could help ease the debt burden of local government financing vehicles (LGFVs), as Beijing steps up its efforts to reduce debt risks.
LGFVs were set up by Chinese local governments to fund infrastructure investments, and their combined debt has ballooned to roughly $9 trillion, or approximately half the value of China’s entire economy, posing risks as growth falters.
$1 = 7.2971 Chinese yuan renminbi Reporting by Li Gu in Shanghai and Tom Westbrook in Singapore Editing by Mark Potter
Published Date:2023-10-11