First Corporate Bond under Registration-Based System Issued on SSE

16 Mar 2020

In order to thoroughly implement the relevant work arrangements made by the State Council, under the leadership of the China Securities Regulatory Commission (CSRC), the Shanghai Stock Exchange (SSE) has earnestly studied and enforced the new "Securities Law" and spared no effort to ensure the sound implementation of the registration-based system for bonds. On March 16, China Coal Energy Co., Ltd. issued the first corporate bond on the SSE under the registration-based system. SInce the company was eligible for the optimized procedure of financing regulatory review, the project took only 11 working days to complete the procedures of application acceptance, review, registration and issuance. The efficiency of review and registration for corporate bonds isgreatly improved, and the bond issuance becomes more market-oriented. By March 16, the SSE had accepted the applications for the first batch of 54 corporate bonds to be publicly issued under the registration-based systems, with a planned financing size of RMB297.6 billion.

Finance acts as the blood for the real economy. Serving the real economy is the bounden duty and purpose of finance. On March 10, Premier Li Keqiang said at the executive meeting of the State Council that it is vital to push forward the recovery of work and production on the entire industry chains in an orderly manner, and coordinate the advancement of epidemic prevention and control and economic and social development. Both speeding up removing the obstacles in the industry chains and facilitate the capital flow are equally important. Under the guidance of the CSRC, the SSE has vigorously implemented the requirements of the executive meeting of the State Council, identified the priorities in the financial services, further stimulated the vitality of market players through the reform of the registration-based system, and built up experience in supporting the real economy via direct financing. At the same time, taking full advantage of the registration-based system for bonds, the SSE has actively encouraged the core enterprises on the industry chains to finance through bond issuance, so that the enterprises can pay cash to upstream and downstream companies in the form of prepayment, thus reducing the cash flow pressure on and the financing costs for the small and medium-sized enterprises. As a leading enterprise in the industry chain, China Coal Energy Co., Ltd., the issuer of the first publicly offered corporate bond under the registration-based system, will use no less than 10% of the raised funds to pay the purchase costs and transportation expenses, etc. in the form of advance payment to its upstream suppliers and relevant logistics companies, so as to drive supporting enterprises to enhance the synergy in the resumption of work and production.

The smooth implementation of the registration-based system has brought new opportunities for the high-quality development of the bond market. Going forward, under the leadership of the CSRC, the SSE will continue to thoroughly implement the requirements of the new “Securities Law”, adhere to the principles of market orientation and rule of law, comprehensively propel the reform of the registration-based system, and further improve the efficiency of the bond market serving the real economy and national strategies.