Chinese Brokers Sell USD10 Billion of Bonds to Lower Financing Costs
(Yicai) Jan. 23 — Nearly 30 Chinese brokerages have issued CNY70.7 billion (USD10 billion) of bonds in the new year, seeking to trim their financing costs amid the country’s relatively loose monetary policy.
GF Securities sold CNY9 billion of bonds to top the list as of yesterday, followed by Guosen Securities at CNY7.7 billion, according to open-market data. The trend began last year when the annual figure hit CNY1.51 trillion (USD210.6 billion), a 34 percent surge on 2022.
The newly issued bonds lower the brokers’ borrowing costs, with the proceeds mainly earmarked for repaying interest-bearing debt and replenishing working capital.
Bond sales are becoming a key financing channel for Chinese securities firms seeking to bolster their capital strength and boost their liquidity, a bond market insider told Yicai. With the need for business innovation and development increasing, bond issuance by securities firms is expected to increase, the person added.
The average annual coupon on new one-year or shorter period bonds fell to 2.51 percent as of yesterday from 2.56 percent last year, while that for three-year notes dropped to 2.85 percent from 3.17 percent, according to figures from Hithink Royalflush Information Network.
Editors: Tang Shihua, Martin Kadiev
