China allows auto finance firms to issue bonds

China will allow car financing companies and financial leasing firms to issue bonds to boost the development of the local fixed-income market, the People's Bank of China (PBOC) said on Monday.

In a new regulation published on its website, the central bank said automobile financing firms can apply to issue bonds if they have at least 800 million yuan in registered capital.

For financial leasing firms the capital threshold is 500 million yuan.

Issuers must have been profitable for the past three years in a row.

China had 12 financial leasing firms at the end of July with total assets at 108.1 billion yuan; its 10 automobile finance firms have total assets of 37.8 billion yuan.

The regulation was drawn up jointly with the China Banking Regulatory Commission (CBRC).