Analysis Of Municipal Bond Practices In China

On the basis of analysis on the necessity and feasibility of issuing municipal bonds in China made by others, the paper makes study on how to issue municipal bonds in China. To decide qualification of the issuers is the thing we should do first. In China, only the cities with high development level are the qualified issuers. Personal and institutional investors will buy municipal bonds, and the security dealers and investment fund will play an important role in the market. When to decide the circulation, we must take the fiscal expendituresand revenues, the development of the project into account. Call feature is important for municipal bonds. These are the optional redemption, the mandatory sinking fund and the extraordinary redemption. Because of theexistence of the credit risk, we must establish the system to avoid it. The rating systemu system of information disclosure and system of insurance on bonds are included in the system. Finally, we make a practical analysis on issuing municipal bonds in the city of Beijing.