BEIJING, May 7 (Xinhua) -- The National Association of Financial Market Institutional Investors (NAFMII), a self-regulatory organization aiming to promote development of China's over the counter (OTC) market, publicized on May 5 trial rules on bond replacement on the interbank market for non-financial enterprises to boost liquidity, reported Xinhua Finance on Friday.
NAFMII released altogether four sets of trial and new rules on non-financial corporate debt financing vehicles replacement, collection of content, default and risk treatment, and self-regulatory management measures implementation on the interbank bond market, saying that introducing bond replacement mechanism into the interbank bond market will enrich the tools kit of active debt management for issuers and better protect the legitimate rights and interests of investors.
Bond replacement here refers to conducts of non-financial enterprises issuing new bonds to replace their old debts. The replacement bond issuers are required to issue the replacement offer to all holders who can participate in whole or in part.
Recent years, there have been many bond replacement cases in overseas U.S. dollar-denominated bond issuance by Chinese issuers. Part of the issuers managed to ease their liquidity tightness via the bond replacement while investors in turn gained more choices. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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