The NDRC Will Tighten Up The Auditing Standards Of Corporate Debt Risk Prevention And Control.

Recently, the national development and Reform Commission (hereinafter referred to as the national development and Reform Commission) issued several opinions on Comprehensively Strengthening the risk prevention of corporate bonds.

It needs to be pointed out that the "opinion" is currently being tried out, and the NDRC "will revise and improve the" opinions "according to the trial situation, and formally issue and execute the selection.

Reporters had previously reported that although the risk of default since the beginning of the year has not yet affected corporate bonds that have always been issued by government credit endorsement, in early August, the NDRC held a risk Forum on corporate bonds, inviting some provincial development and Reform Commission, securities firms, rating agencies and other institutions to participate in soliciting opinions on how to strengthen corporate debt auditing and management methods, and prompt the potential risks of corporate bonds.

The "opinion" was formed on the basis of the Symposium and soliciting opinions.

Specifically, the entry conditions of some debt issuing enterprises have been increased, especially for the requirements of asset liability ratio. For example, the two asset liability ratio standards of "accelerating audit category" are lower than 30% and 50%, down to 20% and 30%.

The head of a fixed income division of a brokerage firm told reporters earlier that as far as corporate bonds are concerned, because they carry more government macro control strategies and industry oriented functions, once a default occurs, they may have adverse effects on government credit, and improving audit thresholds will help reduce the risk of default.

At the same time, the "opinion" has also added a number of new.

In particular, it involves the requirement of accounts receivable.

However, the Research Report of CICC also pointed out that in the relevant requirements, the space for controlling the flexibility is still relatively large, and the effect and intensity of the actual implementation remains to be seen.

In addition, the words "principle" and "strict control" have been used for many times, which also leave room for the flexible operation in the actual audit process.

Judging from the various measures, the NDRC is tightening up its examination of corporate bonds, especially the city investment bonds.

In April 2013, in order to further improve the examination and verification of corporate bond issuance, the NDRC issued the notice on further improving the examination and verification of corporate bond issuance (No. 2013] 957, and classified the management of corporate bond issuance according to three situations: "speeding up and simplifying auditing categories", "strictly checking categories" and "appropriately controlling scale and rhythm".

Correspondingly, the current "opinion" has strict standards for auditing the first two types of corporate bonds.

First of all, to speed up and simplify the audit category, the "debt ratio below 957, the credit arrangement is relatively perfect and the main body credit level is above AA+ and the unsecured bonds", "the local government's regional city investment company applies for the issuance of the first corporate bond, and the issuer's asset liability ratio is less than 50% of the bonds" requirements, the "opinion" was reduced to 20% and 30%, respectively, in the document No. AA+.

In other words, the issuer's asset liability ratio is even higher.

Secondly, for strictly audited classes, "No. 957" puts forward that "three cities and cities with a high debt to asset ratio (more than 65% of urban investment enterprises, more than 75% of the general production and business enterprises) and bonds with debt levels below AA+", "two consecutive times of issuing bonds, and an asset liability ratio of 65% above the city", the three ratio has dropped to 60%, 70% and 60% in the opinion.

According to the statistics of CICC, 175 of the 979 cities have more than 60% assets and liabilities ratio, and these issuers issue bonds in principle, and 93 of them are subject to AA ratings. If these enterprises fail to reach AA+ through credit guarantee or two consecutive issuing bonds, they will be strictly audited.

City investment bonds are "highly concerned" in the opinion.

"Opinions" pointed out that the city investment enterprise application for issuing bonds, "the regional full caliber debt rate of more than 100%, will temporarily accept the regional urban investment enterprises may increase the government debt burden of the application for issuing bonds".

According to the director of the fixed income Department of the securities company, according to the previous regulations, the premise of the inadmissibility is that the investment income of the investment and financing platform accounts for more than 30% of the enterprise income. This cancellation means that the scope of the inadmissibility will be further expanded.

At the same time, according to the corporate bond auditing manual issued in 2013, it is required that the scale of issuing bonds should match the local government's financial strength and enterprise's strength as far as possible, and the scale of applying for issuing bonds in principle should not exceed the general budgetary revenue of the local governments.

Generally speaking, corporate bonds can be divided into two categories: one is city debt, the other two is industrial debt.

City investment bonds are issued by local government investment and financing platform, mainly for investment purposes such as urban infrastructure.

The main business of such companies is local infrastructure or public welfare projects. The land mortgage is the most important way of repayment, and the fluctuation of its valuation value may increase the uncertainty of debt repayment sources.

A number of new requirements "overweight"

In addition to raising part of the access threshold

It is worth noting that the "opinion" has added an entry requirement, which focuses on the application of accounts receivable for debt issuing enterprises.

According to the opinion, enterprises with accounts receivable, other accounts receivable and long term accounts receivable totaling more than 40% of net assets should pay close attention to the government and relevant departments. Enterprises that have serious debts involving accounts receivable, other accounts receivable, long-term accounts receivable and in construction projects involving more than 60% of the total net assets and government departments concerned illegally invoke funds or fail to perform payment will not accept the application for issuing bonds.

This is mitigated by the relevant provisions of accounts receivable and other receivables that exceed 40% of net assets in principle at the beginning of the symposium in early August.

CICC's August report pointed out that 40% of this index is more difficult to count than the excess coupons, and can only reflect the annotations of annual reports.

However, considering that many urban investment enterprises are mainly provided by the government, such as infrastructure and land development, the proportion of government accounts receivable from such enterprises may easily exceed the standard.

For such enterprises, it is difficult to meet the requirements, only to increase the scale of net assets, or to speed up the recovery of funds, which is equivalent to raising the support of local governments.

According to the director of the fixed income department, although the "opinion" has identified 60% of this proportion, some enterprises still have greater pressure.

At the same time, the Opinions also put forward new requirements in terms of supervision and comprehensive supervision.

According to the opinion, strengthening the comprehensive supervision of the government debt at the location of the enterprise has added a new requirement: "the local government owned enterprises have issued outstanding corporate bonds, and the balance of the medium-term notes has exceeded 8% of the GDP ratio of the local government at that time, and the debt issuance of its affiliated enterprises should be strictly controlled".

According to the statistics of CICC, 13 of the 221 municipal government samples accounted for more than 8% of corporate bonds and GDP in 2013.

The "opinions" also cautioned the high cost financing behaviors such as the collective trust scheme and the special fund of "famous stocks and real bonds". For the first time, it clearly stated that the "short-term high interest financing" business after 2013 is still more than 1.5 times the bank's benchmark interest rate of the same period. The accumulated amount exceeds the total liabilities of the enterprises 10%, and no longer accepts the application for issuing corporate bonds.

According to the current one-year loan benchmark interest rate 6%, more than 1.5 times more than 9%.

CICC has a rough understanding that the expected yield of the trust products of the 1-2 year trust of the city investment platform is about 8.5%-9.2%, plus other fees such as trust fees and so on. The comprehensive cost generally reaches 10%-12%, even if the cost of the trust fund of the prefecture level city is relatively hard even less than 9%. This will lead to the difficulty of issuing corporate bonds in 2013.