Local Government Debt Stood at 16.6 Trillion Yuan as of End of May

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The latest data from the Ministry of Finance (MOF) indicates that the total debt balance of China’s local governments exceeded 16 trillion yuan as of the end of last month.

During the period from January to May Chinese local governments issued 876.6 billion yuan in bonds, including 600.2 billion yuan in standard bonds and 276.4 billion yuan in special bonds.

17.1 billion yuan of funds raised were for new undertakings, while 859.5 billion yuan was used for bond swaps or refinancing.

The data further points to a sharp uptick in local government debt raising in May, which saw 355.3 billion yuan in bond issuance, including 236.6 billion yuan in standard bonds and 118.7 billion yuan in special bonds.

Of this amount 17.1 billion yuan was used for new undertakings, and the remaining 338.2 for bond swaps or refinancing.

The average maturity of local government bonds issued during the January – May period was 5.8 years, with an average maturity of  5.7 years for standard bonds and 5.9 years for special bonds.

The average coupon rate was 3.97%, with an average rate of 3.96% for standard bonds and 4.01% for special bonds.

As of the end of May the nationwide local government debt balance was 16.6272 trillion yuan, including 10.4526 trillion yuan in standard debt and 6.1746 trillion yuan in special project debt.

15.6038 trillion yuan of this debt was in the form of government bonds, with a remaining stock of 1.0234 trillion yuan in non-bond debt.

The amount of local government debt outstanding remains well beneath the ceiling of 20.997430 trillion yuan set for 2018 by the First Session of the 13th National People’s Congress in March.

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