SHANGHAI, Sept 6: China’s Guangdong provincial government auctioned 8.6 billion yuan ($1.4 billion) in five- and seven-year local government bonds on Thursday, at yields of 3.21 percent and 3.40 percent, respectively.
The bond volumes were equally divided between the two tenors.
Guangdong is the second regional government to directly sell bonds on its own under a pilot programme this year. The Shanghai municipal government sold 8.9 billion yuan last month.
The Ministry of Finance, which usually sells bonds on behalf of localities, has set a quota of 250 billion yuan for local government bond issues this year, up from 200 billion last year.
Four wealthy regional governments—Shanghai, Shenzhen, Guangdong and Zhejiang—are from time to time permitted to issue bonds directly.
Municipal authorities are barred under law from borrowing directly from markets but amassed a mountain of debt via financing vehicles to fund infrastructure projects in response to Beijing’s stimulus package during the global financial crisis.
For stories on Chinese debt issues, click on. ($1=6.34 Yuan)
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