SHANGHAI, May 28 (Reuters) - China’s southern province of Guangdong may become the first local government to issue municipal bonds under a pilot scheme, the semi-official China Business News said on Wednesday.
The province opened a tender for rating companies for the issue on Monday and is set to organise an underwriting group on June 9 and 10, the newspaper said, quoting unnamed sources.
“Except Guangdong, no other provinces and cities have a timetable for their issues yet,” China Business News said.
Nine Chinese rating firms competed in the tender and Shanghai Brilliance Credit Rating and Investors Services Co won it, the newspaper said.
The Ministry of Finance said last week that 10 local governments had been given quotas to issue a combined 109.2 billion yuan ($17.52 billion) worth of municipal bonds this year.
Earlier, the ministry announced China’s watershed move of letting the 10 local governments to issue and redeem their own bonds in an experiment to straighten out messy state budgets, and start the clean-up of its $3 trillion public debt problem.
It said the governments in Shanghai, Zhejiang, Guangdong, Shenzhen, Jiangsu, Shandong, Beijing, Qingdao, Ningxia and Jiangxi will be part of a pilot scheme that effectively creates China’s first-ever municipal bond market.
Among the 10, Guangdong was given the second biggest quota of 14.8 billion yuan only after Jiangsu’s 17.4 billion yuan. ($1 = 6.2486 Chinese Yuan) (Reporting by Lu Jianxin and Kazunori Takada; Editing by Eric Meijer)