Zhang Jiqiang, chief analyst of Huatai fixed income, believes that there are a series of requirements in implicit debt replacement, such as clear relationship between debt and creditors rights, clear corresponding assets, and one-to-one corresponding due debt implementation in the replacement process according to the project. The debt formed by the investment and financing projects of the trading platform conforms to the above provisions, and has certain advantages in the replacement and resolution of implicit debt. With the promotion of implicit debt replacement, the trading platform may continue to benefit.
However, the reporter learned that because the traffic debt has cash flow, enterprises can rely on project income or corporate credit financing, this type of debt will not be recognized as implicit debt; but once the local government promises to repay or provide guarantee with financial funds, it will be recognized as implicit debt. For the replacement of the former type of debt, there is no rigid requirement for supervision, but because there is no local government guarantee, in practice, banks are more interested in the project income.
Multi provinces promote debt resolution
In May this year, in addition to Gansu air travel, Hubei communications investment also pushed for implicit debt replacement. In the last ten days of that month, Hubei Communications Investment and nine financial institutions, including Hubei Branch of China Development Bank, signed the highway financing and rescheduling syndicated loan contract, with a loan scale of 120 billion yuan.
Under the agreement, Hubei Communications and Investment Co., Ltd. repaid 120 billion loans of 22 expressways owned by the company in advance, and then re signed the loan contract. Compared with the past, the average loan life of new loans has been extended from 10 years to more than 25 years, and the loan interest rates have all been lowered below the benchmark interest rate. It is estimated that the company can save 5.6 billion yuan of interest expense and reduce the debt repayment by 55.3 billion yuan by the end of the 14th five year plan.
This not only alleviates the burden of enterprises, dissolves the risk of Expressway stock debt, but also injects fresh water into Hubei transportation construction investment and financing platform. Relevant people from Hubei provincial government said that this would be conducive to the formation of a sound investment and financing mechanism and debt repayment mechanism for expressways.
Some provinces inject highway assets into newly formed companies and apply for loans from banks. For example, in September 2019, Qinghai communications Holding Group Co., Ltd. was established to promote the resolution of traffic debt.
After the establishment of Shanxi traffic control, the original 34 government loan repayment Expressway units were integrated and reorganized into 16 Expressway branches. The operational expressways under the jurisdiction of road and bridge group, traffic investment group and expressway group were gradually incorporated into the management of 16 Expressway branches according to administrative divisions, and the operation system and mechanism were innovated to make them have cash flow. In the first half of 2019, the company translated and replaced the debts of 233.7 billion yuan to China Development Bank and other syndicates.
Zheng Zhijie, the former president of China Development Bank, said at a forum last December that Shanxi Province has built many expressways in the name of the Department of communications. The sources of funds include loans, trusts, financial management, etc., with a long or short term and high or low interest rates. The loans due in a period of time are relatively concentrated and the interest rate is relatively high. After the negotiation between CDB and Shanxi Province, Shanxi Province established a new company to reorganize the debt, lengthen the term of the loan through the syndicated loan, and reduce the debt interest rate.
Jilin realized debt restructuring by purchasing assets through loans. In March 2019, six banks, including Jilin Expressway Group and China Development Bank, signed a financing and rescheduling syndicated loan with a scale of nearly 70 billion yuan (with a term of 25 years and a benchmark interest rate of 4.9%), to promote debt resolution. The companys new borrowings are mainly used to purchase the assets of expressway, facilities along the road, housing construction projects, land and other assets under the name of Jilin Provincial Department of communications.
Sun Binbin, chief fixed income analyst of Tianfeng securities, said that this is a key step for the company to straighten out the assets, liabilities and charging rights of the expressway in the province, realize the transformation of the implicit government debt to the operational debt of the enterprise, and also extend the repayment period of the corresponding debt.
Project revenue is the key
At present, some replacement measures have been implemented. Guizhou Expressway Group Co., Ltd. disclosed the bond raising instruction in February this year. In June 2019, the company signed a syndicated loan contract with CDB and other banks for the financing re arrangement project, which was used to replace the stock debt of 135.4 billion yuan.
A person from the Credit Department of a joint stock bank said that for banks, the expressway is one of the few credit assets that can balance high investment and low non-performing. For local governments, highway debt repayment mainly depends on toll revenue, but the annual toll revenue is obviously smaller than the debt principal, and there is a large debt pressure on local governments, so debt restructuring and smooth term become the demands of local governments.
According to the development statistics bulletin of transportation industry in 2019, the national toll road debt balance by the end of 2018 was 5691.36 billion yuan. Among them, the balance of bank loans at the end of the year was 4774.42 billion yuan, and the balance of other debts was 916.95 billion yuan, accounting for 83.9% and 16.1% respectively.
In syndicates, CDB often plays a crucial role. This is mainly due to CDBs long-term focus on infrastructure business, relatively high loan balance in the field of transportation, and part of the debt is also included in the implicit debt. Since the second half of 2018, the central government has asked for the resolution of implicit debts, among which CDB has also participated: Zhenjiang implicit debt resolution plan and Shanxi resolution plan have attracted market attention.
Special loans are provided by CDB for Zhenjiang pilot debt resolution scheme, with the interest rate around the benchmark. The asset management company under Zhenjiang Finance Bureau is the main body of the unified loan, and then it is put into each platform of the jurisdiction in the form of ordinary loan, which is mainly used to replace the high cost non-standard included in the implicit debt. But the program was not adopted.
When it comes to the difference, Zheng Zhijie said that Shanxis project (traffic control) has cash flow through corporate operation, but Zhenjiangs project is purely public welfare.
Sun Binbins analysis said that the market-oriented implicit debt solution needs to match high-quality assets. In the case of Shanxi traffic control, not only the Department of transportation of Shanxi Province allocates all the government loan repayment expressways to Shanxi traffic control, but also the SASAC classifies the three operating expressways into Shanxi traffic control. Most of the assets of Shanxi traffic control are the most favorite Expressway assets of the bank. In the future, the operation of these assets will generate relatively stable cash flow.
Source: Chen Hequn, editor in charge of 21st century economic report_ NB12679