Issues Relating to Small and Medium Sized Enterprises' Issuance of Collective Enterprise Bonds

Wayne Chen and Baker Chen
Llinks Law Offices
[email protected], [email protected]

Given that it is difficult for small to medium-sized enterprises to get financing under China's tightened money policy, collective enterprise bonds are becoming a new source of financing. Issuance of collective enterprise bonds by small to medium-sized enterprises, in the way of United Organisation, Allocated Debt and Collective issuance, will solve some of the difficulties for those enterprises to individually issue enterprise bonds because of their small size. Among the advantages are a simplified examination and approval procedure, improved issuance efficiency and a reduction in the issuance expenses. The issuance of the 2007 Shenzhen Small and Medium Sized Enterprise Collective Enterprise Bond and the 2007 Zhongguancun High-tech Small and Medium Sized Enterprise Collective Enterprise Bond has proved a successful experience in the market, and now in places such as Shanghai and Chongqing the issuance of collective enterprise bonds by small to medium-sized enterprises is already on the agenda.