As a new tool for local debt management, refinancing bonds help local governments effectively manage debt pressure by issuing new bonds to repay the principal of old bonds. This article will introduce in detail the definition, characteristics, and role of refinancing bonds, as well as their special types – the concept and use of special refinancing bonds.
1. Definition of refinancing bonds
A refinancing bond is the issuance of a new bond to raise funds to repay a portion of the principal amount of a maturing local ** bond. This type of bond is not used for direct project construction, but is used to alleviate the debt pressure of **.
2. Characteristics of refinancing bonds
1. Debt management tools: mainly used to alleviate the debt repayment pressure of local governments.
2. Quota management: The issuance of refinancing bonds by local governments shall follow the principle of quota management.
3. Not used for project construction: This type of bond cannot be directly used for project construction.
3. Special refinancing bonds
Special refinancing bonds are a special form of refinancing bonds, the funds of which are mainly used to repay existing debts, and are essentially used to replace local implicit debts.
4. The interest rate on refinancing bonds
The interest rate on a refinancing bond is usually determined based on market conditions and the characteristics of the bond. For example, special refinancing bonds may have different winning interest rates, depending on the market environment and the specifics of the issuance.
Refinancing bonds are an important tool for local debt management, helping to better balance fiscal budgets and debt pressures. For investors, understanding the characteristics and role of refinancing bonds is of great significance for investment decisions.