Special comment: Observation on the resolution of implicit debt

In October 2018, the Ministry of finance put forward six ways to resolve the stock debt in the instructions for filling in statistics of local full caliber debt inventory, based on which local governments have practiced many ways to resolve the implicit debt. In terms of the implementation effect, it can be roughly divided into "repayment, replacement, extension and transformation", and a variety of operation methods have evolved in practice

main points

Repayment: the repayment operation methods are mainly divided into the arrangement of repayment expenses with funds in the government budget, the explicit replacement of implicit debt with government bond funds, the digestion of short-term debt pressure of tail urban investment company with overall funds in the region, etc. However, it still needs to be concerned that under the background of the remaining downward pressure on the economy, the limited financial resources of the government and the cooling of the land market, the government's spending capacity is limited; There is no universal significance for the pilot of institutionalized County debt, and the pilot of no hidden debt in the whole region is only carried out in areas with strong economic strength.

Replacement and extension: replacement of classified debt is one of the more mainstream methods at present, including policy banks or commercial banks providing long-term and low interest rate loans to the urban investment company to replace or restructure the implicit debt of the urban investment company; Bank financial investment subsidiaries participate in debt to equity swap and promote the urban investment company to reduce leverage; The urban investment company transferred its equity, carried out mixed reform, and solved the liquidity pressure. Among them, debt to equity investment funds still can not completely get rid of the demand for fixed capital return, and most of them stay in the category of "clear shares and real debt", which is only beneficial to solve the liquidity pressure of urban investment companies and optimize the debt structure. The simple extension is to maintain the main body of creditor's rights and debts unchanged, and achieve the purpose of prolonging the duration and dispersing the debt pressure by re signing the contract and re negotiating the debt term, interest rate and other elements. In practice, the extension and replacement are generally carried out simultaneously and jointly as the goal, and the effect of optimizing the debt structure and vacating the debt space is achieved by changing the creditor's right and debt relationship and debt form.

Transformation: the transformation of implicit debt into corporate operational debt, transformation debt, cooperative debt, and the transformation of repayment subject caused by the integration and reorganization of urban investment company are the specific evolution of the "transformation" of debt. Through the form of operational asset injection, on the one hand, it can increase the coverage of the assets of the urban investment company to the debt at the time point, on the other hand, it can expand the operating cash inflow of the urban investment company and gradually turn the implicit debt into the operating debt of the company; By means of "supporting the weak by the strong" and "integrating the strong and the weak" in the region, the objectives of weakening or withdrawing the functions of the regional weak qualified urban investment company, and the unified control of debt repayment and rolling of the urban investment company with good qualification and prominent functions will be finally achieved. In recent years, local governments have vigorously promoted the transformation of urban investment companies, including the transformation of business types and the transformation of existing business models. Its ultimate goal is to repay implicit debt through the cash flow brought by transformation and development. Transformation is an important way to convert debt. Cooperative debt solves the capital expenditure pressure of the urban investment company in a market-oriented way with the idea of win-win and development, meets the demands of industrial development and the development of stock debt resources.

 

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