China's Special Debt-to-Equity Bonds to Be Capped at 70% of Equity
Yicai Global
/SOURCE : Yicai
China's Special Debt-to-Equity Bonds to Be Capped at 70% of Equity

(Yicai Global) Dec. 26 -- The National Development and Reform Commission, China's top economic planning agency, has published new guidelines that allow companies to issue special bonds to fund debt-to-equity swaps with the amount capped at 70 percent of the equity.

Issuers may replenish working capital with no more than 40 percent of the total funds raised via the issuance, the new rules stipulate.

The State Council, or cabinet, announced two major policies on deleveraging and debt-to-equity swaps on Oct. 10. Insiders expect listed firms to be the first to make use of the new policies.

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