1. Corporate Bonds
Regulatory Authority: National Development and Reform Commission (NDRC)
Issuer: Urban Investment Corporation
Term: Over 1 year
Issuance Scale: 3 years' net profit can cover the bond's 1-year interest
Review Timeline: 3-5 months
Use of Proceeds: Except for special varieties such as small and micro enterprise credit enhancement bonds, fund bonds, and debt-to-equity special bonds, the funds must be used for the investment projects
Guarantee Method: In principle, district and county platforms, except for issuing county special bonds, need to add a guarantee of AA+ or above
Rating: Mandatory rating
Prominent Features: Cross-market circulation, low default rate, mainly urban investment enterprises2. Public Offering of Corporate Bonds
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(1) General Public Offering
Regulatory Authority: China Securities Regulatory Commission (CSRC), Shanghai and Shenzhen Stock Exchanges
Issuer: Urban investment companies and industrial companies that meet the classification management requirements
Term: Over 1 year, high-quality issuers may issue bonds with a term of less than 1 year
Issuance Scale: The net profit of the past 3 years should be able to cover the interest of the bonds for 1 year
Review Timeline: The process takes a relatively long time
Use of Proceeds: For urban investment companies with implicit debt and high regional debt ratios, there are restrictions on increasing the debt balance; for qualified urban investment companies and general industrial enterprises, the use of funds is relatively flexible
Guarantee Method: It is recommended that urban investment companies with a general budget revenue of less than 5 billion, a main body rating of AA or below at the county level, or with an asset scale of less than 10 billion, to add guarantees; top 100 county AA platforms can issue directly
Rating: Rating is not mandatorySalient Features: High approval efficiency
(2) Small Public Offerings
Regulatory Authority: China Securities Regulatory Commission (CSRC), Shanghai and Shenzhen Stock Exchanges
Issuers: Urban investment companies and industrial companies that meet the classification management criteria
Term: No term limit
Issuance Scale: The net profit of 3 years should be able to cover the interest of the bond for 1 year
Review Timeline: 1-2 months
Use of Raised Funds: For urban investment companies with implicit debt and high regional debt ratios, there is a restriction on the increase of debt balance; for eligible urban investment companies and general industrial enterprises, the use of funds is relatively flexible
Guarantee Method: It is recommended that urban investment companies with a general budget revenue of less than 5 billion, a main body rating of AA or below at the district and county level, or with an asset scale of less than 10 billion, add guarantees; top 100 counties with AA platforms can issue directly
Rating: Rating is not mandatoryProminent Features: High Approval Efficiency
3. Non-public Corporate Bonds
Regulatory Authority: China Securities Regulatory Commission (CSRC), Shanghai and Shenzhen Stock Exchanges
Issuers: Urban investment companies and industrial companies that meet classification management criteria
Term: No term limit
Issuance Scale: Not exceeding 40% of net assets
Review Timeline: 1-2 months
Use of Funds: For urban investment companies with implicit debt and high regional debt ratios, there is a restriction on increasing debt balances; for qualified urban investment companies and general industrial enterprises, the use of funds is relatively flexible
Guarantee Methods: It is recommended that urban investment companies at the district and county level with a general budget revenue of less than 5 billion and a main body rating of AA or below, or urban investment companies with an asset scale of less than 10 billion, add guarantees; top 100 counties with AA platforms can issue directly
Rating: Rating is not mandatoryHighlighted Features: High approval efficiency
4. Asset-Backed Securities
Regulatory Authority: China Securities Regulatory Commission (CSRC), Shanghai and Shenzhen Stock Exchanges
Issuer: Determined by the underlying assets
Term: Determined by the underlying assets
Issuance Scale: Determined by the underlying assets
Review Timeline: Approximately 2 months
Use of Raised Funds: Commitment not to use for real estate or financial speculation is required
Guarantee: It is recommended that urban investment companies with a general budget revenue of less than 5 billion, a main body rating of AA or below at the county level, or urban investment companies with an asset scale of less than 10 billion, to add a guarantee. Top 100 county AA platforms can issue directly
Rating: Rating is not mandatoryProminent Features: Dependence on Underlying Assets
("Six Truths" Principle: In October 2008, the National Association of Financial Market Institutional Investors (NAFMII) established the "Six Truths" principle, which refers to the six principles of "real company, real assets, real projects, real support, real debt repayment, and real cash flow". This means that it is explicitly required that the applying companies must not be "shell" companies, and they must have sound internal controls, with independent business operations and company finances.)
5. Medium-term Notes
Regulatory Authority: NAFMII
Issuer: Enterprises that comply with the "Six Truths" principle
Term: More than 1 year
Issuance Scale: Specific requirements of the NAFMII form system
Review Timeline: 3-4 monthsUse of raised funds: Project investment, replenishment of working capital, and debt repayment. There is a high requirement for replenishing working capital.
Guarantee method: For district-level urban investment companies with general budget revenue of less than 5 billion and a main body rating of AA or below, or urban investment companies with assets of less than 10 billion, it is recommended to add a guarantee. Top 100 counties with AA platforms can issue directly.
Rating: No mandatory rating requirement.
Prominent feature: Reliance on underlying assets.
6. Short-term financing bills
Regulatory authority: Association of Traders
Issuer: Enterprises that comply with the "Six True" principles
Term: Within 1 year
Issuance scale: Specific requirements of the NAFMII form system
Review time: 3-4 monthsUse of raised funds: Project investment, replenishment of working capital, and debt repayment. There is a high requirement for replenishing working capital.
Guarantee method: For district-level urban investment companies with a general budget revenue of less than 5 billion, or with a main body rating of AA or below, it is recommended to add a guarantee. Top 100 county AA platforms can issue directly.
Rating: There is no mandatory requirement for rating.
Prominent features: The first application and approval process is strict, while subsequent issuance reviews are relatively relaxed.
7. Super short-term financing bills
Regulatory authority: The Association of Transaction Merchants
Issuer: Enterprises that comply with the "Six Truths" principle
Term: Not exceeding 270 days
Issuance scale: Specific requirements of the NAFMII form system
Review timeline: 3-4 monthsUse of raised funds: Project investment, supplementary operating capital, debt repayment. There is a high requirement for supplementary operating capital.
Guarantee method: For district-level urban investment companies with general budget revenue of less than 5 billion and a main body rating of AA or below, or urban investment companies with asset scale less than 10 billion, it is recommended to add guarantees. Top 100 county AA platforms can issue directly.
Rating: Rating is not mandatory.
Prominent features: The first application and approval process is strict, while subsequent renewal review is relatively relaxed.
8. Non-publicly directed debt financing instruments
Regulatory authority: The Association of Transaction Merchants
Issuer: Enterprises that comply with the "Six Truths" principle
Term: More than 1 year
Issuance scale: Specific requirements of the NAFMII form system
Review time: 3-4 monthsUse of raised funds: project investment, replenishment of working capital, and debt repayment. There is a higher requirement for working capital replenishment.
Guarantee method: For district-level urban investment companies with a general budget revenue of less than 5 billion and a main body rating of AA or below, or urban investment companies with an asset scale of less than 10 billion, it is recommended to add guarantees. Top 100 county AA platforms can issue directly.
Rating: There is no mandatory requirement for rating.
Prominent features: The first application approval is strict, and the subsequent continuous issuance review is relatively relaxed.
Overall, after nearly a decade of development, the overall scale of China's credit bond market (including asset securitization products that are essentially debt in nature) has expanded significantly, growing from 3.58 trillion in 2012 to 13.90 trillion in 2020, an increase of 288%. This is consistent with China's economic growth logic of "debt + investment" over the past decade.
Looking at the sub-species, the new policy for corporate bonds in 2015 and the CSRC's relaxation of ABS financing in 2016 have jointly driven the rapid development of the exchange bond market; the interbank bond market has always maintained the largest share of the bond market with the ample funding support of the banking system; the corporate bonds issued by the Development and Reform Commission have been relatively stable in recent years due to the restriction that the use of funds must match the project.