Local governments in China are selling bonds to raise cash like never before to help shore up the economy.
Authorities in Sichuan and Henan provinces will offer a combined 87.6 billion yuan ($12.6 billion) combined total of so-called early-issue special bonds since national sales began in 2015 on Thursday. Until 2018, sales began in March after the legislature formally approved the annual budget.
China ordered local governments to move forward with the schedule for the second year to accelerate spending in areas such as transport and energy infrastructure.
Acceleration comes as policymakers seek to manage the pace of the slowdown, even though the economy shows signs of stabilization at a time when an initial trade agreement has been reached that will be signed on the next 15th of the month.
“Demand will be high because local government bond yields are higher than central government bonds, but with the same sovereign ratings,” said Xing Zhaopeng, Australian & New Zealand Banking Group. “Banks will prefer local government bonds for both security and performance”