China to issue 13.1 bln yuan local bonds, 28.6 bln yuan book-entry T-bonds

BEIJING, May 13 (Xinhua) -- China's Ministry of
Finance (MOF) said Wednesday it would issue 13.1 billion yuan (1.92 billion U.S.
dollars) of three-year local government bonds from May 14 to 18 on behalf of
three provinces at a fixed annual coupon rate of 1.71 percent.

The plan allocates 3.1 billion yuan for Hubei
Province, 9 billion yuan for Sichuan Province and 1 billion yuan for Dalian city
in Liaoning Province.

The three local bonds will begin trading on May 20.

The ministry would also issue a batch of book-entry T-bonds
of 28.6 billion yuan, the eighth of its kind this year.

The one-year, short-term bonds have a fixed annual
coupon interest of 0.89 percent, with the selling period lasting from May14 to
18. Trading begins on May 20.

S Korea sees increase in bond issuance in April

SEOUL, May 11 (Xinhua) -- South Korea's bond issuance rose 14.2 percent last month from March as sales of treasuries and bonds by the central bank expanded, the nation's bourse operator said Monday.

The total bonds issued in the nation last month amounted to 65.06 trillion won (52.2 billion U.S. dollars), up from 56.98 trillion won (45.7 billion U.S. dollars), according to the Korea Exchange (KRX).

The April rise came as the Bank of Korea (BOK) sold massive amounts of bonds in a bid to absorb short-term funds from the market, according to the bourse operator.

The rise is also attributable to the government's increased sales of treasuries after it expanded its supplementary budget, the operator said.

The value of the nation's outstanding bonds came in at 948.69 trillion won (761.17 billion U.S. dollars) at the end of April, up 24.63 trillion won (19.76 billion U.S. dollars) from the previous month, it said.

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ECB announces combined new measures to fight downturns

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FRANKFURT, May 7 (Xinhua) -- The European Central Bank (ECB) on Thursday renewed its efforts to fight against economic downturns, with combined measures including cutting its key interest rate to a new low and buying up bonds, surprising most market players.

RATE CUT

The ECB cut its key interest rate by 25 basis points to a record-low 1 percent on Thursday.

ECB President Jean-Claude Trichet told reporters after the ratecut this was not necessarily the lowest point of the cycle, which has slashed the main refinancing rate by 325 basis points since October.

The ECB said the rate cut is due to the fact that the inflation threat to the eurozone continue easing, while the recession deepens.

According to the International Monetary Fund, the 16-nation economy will shrink 4.2 percent this year, more than the projected2.8 percent contraction in the United States and 4.1 percent in the United Kingdom.

Inflation was 0.6 percent in April. The ECB, which aims to keep the rate just below 2 percent, said the figure may drop below zero in 2009.

BUYING UP BONDS

Trichet announced the ECB plans to spend about 60 billion euros(80 billion U.S. dollars) buying covered bonds, taking markets by surprise after Bundesbank chief Axel Weber had campaigned against such a policy, though some smaller nations pushed it.

It marks the first step of the central bank of Europe on a path of quantitative easing, following the U.S. Federal Reserve, the Bank of England and the Japanese central bank.

Unlike its counterparts in the U.S., Britain and Japan, the ECB chose not to buy national bonds, because it was banned by EU laws from buying bonds of EU member countries.

Moreover, a consensus was hard to be achieved on the purchase proportion of the national bonds among the 16 EU members, the main players of the euro zone.

The ECB has "decided in principle to buy euro-denominated covered bonds issued by member countries of the euro zone," said Trichet, adding that "more details will be announced after the next June 4 meeting of the governing council."

The covered bonds, securities issued by banks and backed by mortgages or other loans, are regarded as the safest corporation bonds after the national debt, with its interest rate slightly higher than the national bonds.

Analysts said, with the euro zone banks accounting for nearly three quarters of business financing, expanding money supply to the banks through buying up bonds and providing longer term loans will help to further relax money market conditions with major relief to the banking system.

OTHER MEASURES

The ECB also announced Thursday the extension of unlimited cash loans to commercial banks for up to 12 months from the current maximum of six, with the exact interest rate to be decided on June23.

But the commercial banks will not apply for long-term loans before they are assured that the key interest rate has reached the lowest point.

The current policy showed that no matter whether the ECB further lowers the interest rate or not in June, the rate to be announced then would probably be at the lowest level.

Several policymakers have said they do not hope the rate will drop below 1 percent for practical and psychological reasons.

As the last major measure, the ECB announced Thursday that the European investment Bank (EIB) will become an eligible counterpart in the Euro system's monetary policy operation since July.

The EIB is mainly responsible for providing loans for small and medium-sized enterprises (SMEs), the financing of which was hit hard by the current international financial crisis.

Analysts believed that the coordination between the EIB and the ECB can effectively help the SMEs face the crisis.

SIGNS OF HOPE

Trichet said the latest data and survey information suggested some positive signs of stabilization "albeit at low levels."

For example, the business climate index of the euro zone rebounded in April, its first improvement since may 2008.

But "overall, economic activity is going to be weak for the remainder of the year before gradually recovering in the course of2010," said Trichet.

China to issue 15 bln yuan T-bonds, 15.4 bln yuan local bonds next week

BEIJING, May 8 (Xinhua) -- China's Ministry of Finance (MOF) said Friday it
would issue 91-day treasury bonds with a face value of 15 billion yuan (2.2
billion U.S. dollars) from May 11 to 13.

The issue price, set by competitive bidding, was 99.793 yuan. The annual
yield was 0.85 percent, the ministry said. Interest would be calculated from May
11 and paid in a lump sum at maturity.

The bonds could begin trading on May 15.

The MOF also said it would issue 15.4 billion yuan of three-year local
government bonds from May 11 to 13 on behalf of three provinces: 3 billion yuan
for Heilongjiang Province, 8.4 billion yuan for Yunnan Province and 4 billion
yuan for Zhejiang Province.

Each bond will have a fixed annual coupon rate of 1.77 percent.

The MOF would issue a total of 28.5 billion yuan of local government bonds
in the first half of May on behalf of six local governments, which would also
include Dalian City, Sichuan Province and Hubei Province.

China planned to float a total of 200 billion yuan of local government
bonds this year.

China announces treasury bond issues for May 7-25

BEIJING, May 6 (Xinhua) -- China's Ministry of Finance (MOF) said Wednesday it would issue 27.76 billion yuan (4.06 billion U.S. dollars) of book-entry treasury bonds this week.

The issue period would run from May 7 to 11, the ministry said in a statement on its website.

The 10-year bonds have an annual interest rate of 3.02 percent, with payments half yearly.

The MOF also said it would issue 50 billion yuan worth of certificate T-bonds next week.

The bonds include 40 billion yuan worth of three-year bonds that carry a fixed annual interest rate of 3.73 percent and 10 billion yuan of five-year bonds with a 4.00 percent annual interest rate.

They will be issued from May 11 to 25, the ministry said. Interest will be paid in a lump sum at maturity.

U.S. Treasury again increases auctions of 30-year bonds

WASHINGTON, April 29 (Xinhua) -- The U.S. Treasury Department announced on Wednesday that the number of times it auctions 30-year bonds will be increased to 12 times a year in an effort to deal with the government's soaring debt.

This was the second time this year the Treasury decided to boost the number of auction times of 30-year bonds. Just three months ago, it doubled the frequency of the auctions from four times annually to eight.

At the same time, the Treasury said it will raise 71.0 billion dollars in a series of auctions next week to refund approximately 52.2 billion dollars of privately held securities maturing or called on May 15, 2009 and to raise approximately 18.8 billion dollars.

The upcoming refunding will include auctions of three-year and 10-year notes and the 30-year bonds, according to a statement by the Treasury.

The 71 billion dollars will be part of the government's total borrowing needs for the April-June quarter. The government will have to borrow 361 billion dollars in the second quarter, a record amount for the April-June period, the Treasury estimated on Monday.

It is the third consecutive quarter the government's borrowing needs have set records for those periods.

And the estimate for borrowing this current quarter was much larger than borrowing needs of just 13 billion dollars in the year-ago period.

During the July-September quarter, the government will need to borrow 515 billion dollars, down slightly from the year-earlier level of 530 billion dollars, the Treasury also estimated.

The government borrowed 481 billion dollars in the first quarter of this year.

The huge borrowing needs reflect the soaring costs of the government's economic stimulus package and financial rescue program, and the recession, which has resulted in a sharp decline in tax revenue.

The recession, which started in December 2007, also has boosted government spending for benefit programs such as unemployment insurance and food stamps.

The Obama administration is projecting the federal budget deficit to rise to 1.75 trillion dollars in fiscal year 2009, which ends on Sept. 30, 2009, from the previous record of 454.8 billion dollars set in fiscal year 2008.

To cover the government's borrowing needs, U.S. Congress boosted the limit for the national debt to 12.1 trillion dollars in February this year. The national debt now stands at 11.1 trillion dollars.

Local bonds of Liaoning, Tianjin set for sale

BEIJING, April 14 (Xinhua) -- China's Ministry of Finance is issuing 5.6 billion yuan in local government bonds Tuesday.

Three billion yuan (about 439 million U.S. dollars) in bonds will be sold on behalf of China's Liaoning Province. Another 2.6 billion yuan in bonds will be sold for the Tianjin Municipality.

The bonds will take the form of book-entry national treasury bonds and will be sold to investors between April 14 and 16. They will become tradable as of April 20 on the inter-bank market and securities exchanges, the ministry said.

The fixed coupon for the bonds of Liaoning stands at 1.75 percent. Tianjin is 1.78 percent. Interest for both will be paid annually.

China plans to float 200 billion yuan of local government bonds this year. The first batch for the Xinjiang Uygur Autonomous Region government was issued March 30.

Four other batches of bonds for local government in Anhui, Henan, Sichuan and the Chongqing Municipality, have already been sold.

Three billion yuan of the local government bonds from the eastern Shandong Province is scheduled for bidding April 15, according to the ministry. They will be issued starting April 16-20.

China: use IMF bonds cash to fight crisis

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BEIJING, April 27 -- Any money raised by the sale of
bonds to the International Monetary Fund (IMF) should be used to help developing
countries, China said.

The BRIC nations, made up of Brazil, Russia, India
and China, have called on the IMF to issue the debt instrument as a temporary
measure to increase its resources.

World Bank (WB) President Robert
Zoellick (L) and International Monetary Fund (IMF) Managing Director
Dominique Strauss-Kahn attend the semi-annual session of the Joint
Development Committee of the World Bank and the International Monetary
Fund, in Washington, the U.S., on April 26, 2009. The session was convened
as the spring session of the two institutions entered its second day.
(Xinhua/Zhang Yan)
Photo
Gallery

The four countries are interested in buying the
bonds, the institution's managing director Dominique Strauss-Kahn said at the
IMF spring meeting on Saturday.

"Now we're discussing with different creditors the
way to implement it and the amount that we put in it," he said.

During the G20 summit, British Prime Minister Gordon
Brown said China was willing to pledge up to 40 billion U.S. dollars to the IMF.

While *** no mention of China's promise, Central
Bank Governor Zhou Xiaochuan said the IMF should use its increased resources to
support developing countries in their effort to cope with the financial crisis
and maintain economic development.

He added that developed countries should assume the
main responsibility for stabilizing the financial markets and reigniting
economic growth.

China has already played an active role in
stabilizing global finance and economic growth, Zhou said. Since last year,
China has signed bilateral agreements on currency swaps worth 650 billion yuan
(95 billion U.S. dollars) with South Korea, Malaysia, Belarus, Indonesia and
Argentina as well as China's Hong Kong.

China will continue its pro-active fiscal policy and
its moderately loose monetary policy to maintain momentum in the country's
stable, relatively fast growth, Zhou said.

Brazil's Finance Minister Guido Mantega was quoted by
Dow Jones as saying that the bond should have a relatively short maturity of
around one year, should yield more than U.S. Treasury notes, should qualify as
government reserves and should be tradable on the secondary market.

Mantega said emerging markets that need the money
most should benefit from the new securities the IMF is considering issuing.

Also on Saturday, Zhou stressed the IMF should push
for reforms of special drawing rights - an international reserve asset created
by the IMF to supplement reserves of member countries.

The World Bank and IMF spring conference began on
Friday with a meeting of the Group of 7 wealthy nations - the U.S., Japan,
Germany, France, Britain, Italy and Canada - and was followed with a dinner
meeting of the Group of 20 countries, which include the seven wealthy nations
plus the major emerging markets such as China, Russia and Brazil. The conference
ended yesterday.

(Source: China Daily)

5.8 bln yuan local bonds of Chongqing Municipality set for sale next week

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BEIJING, April 10 (Xinhua) -- China's Ministry of Finance (MOF) announced
Friday that it will issue a total of 5.8 billion yuan (about 849.2 million U.S.
dollars) of local government bonds on behalf of China's western Chongqing
Municipality on April 13.

The bonds, which are the fifth of its kinds in China, will take the form of
book-entry national treasury bonds and be sold to investors between April 13 and
15, and will become tradable as of April 17 on the inter-bank market and
securities exchanges, the ministry said.

The bonds have a fixed coupon of 1.7 percent, according to the bond bidding
that ended on Friday. The coupon is higher than that of the previous two batches
of bonds, with interest to be paid annually.

China plans to float 200 billion yuan of local government bonds this year.
The first batch of Xinjiang Uygur Autonomous Region government bonds was issued
on March 30.

Three more batches of local bonds will be issued in the first half of
April, said sources with China Government Securities Depository Trust and
Clearing Co. Ltd., a non-banking financial institution in charge of centralizing
depository and settlement for the inter-bank bond market.

The ministry said last month that most of the 200-billion-yuan local
government bonds would be issued during the second and third quarters this year.