To keep abreast of issuers’ implementation of relevant requirements on issuing paper and self-regulation when issuing non-financial enterprise debt financing instruments, and to guide and supervise issuers and relevant lead underwriters to do well in follow-up management, NAFMII, in accordance with Procedures for Surveying the Issue of Non-financial Enterprise Debt Financing Instruments in the Inter-bank Bond Market, made a field survey to two steel trade companies, two building materials companies, one chemical company and some small-and-medium sized enterprises in August and September 2012.

Through the survey, NAFMII not only realized a deep understanding of their corporate governance, production and operation, financial condition, as well their use of the raised funds, but also solicited their views on the status quo and development trend of the industry. Lately, steel price is falling rapidly due to the falling demand. Inventories are piling up and their receivables are increasing fast, while the banks have also tightened credit for steel trade companies, leading the steel trade companies into very unfavorable conditions. Due to the economic slow-down, the building material industry is suffering from insufficient downstream demand, overcapacity and incessantly falling prices. Domestic building materials companies are faced with a fair amount of challenges. In addition, there is a significant decline in profitability of some of the chemical companies and small-and-medium sized enterprises.

The survey showed that the companies surveyed can largely meet the requirements on self-regulation, with a small portion of them failing to follow The Rules for Information Disclosure on Issue of Non-financial Enterprise Debt Financing Instruments in the Inter-bank Bond Market. During the survey, many companies mentioned that they are currently going through difficulties and that the successful issue of the debt financing instruments can help meet their capital requirements and reduce cost of capital, and furthermore provide the necessary funds for mergers and acquisitions, product development, expansion into upstream and downstream industry chains in response to the insufficient downstream demand, and unfavorable conditions such as the sharp fall in product prices. Some of the companies also showed interest in innovative products available in the inter-bank market including asset-backed notes, and expressed hope for NAFMII to provide more training opportunities to help companies understand the market and know about the different types of innovative products in the inter-bank market in order to further expand their financing channels. Finally, companies and the lead underwriters said that they will continue to enhance learning of relevant provisions on self-regulation in the inter-bank market, strengthen communication and contact with NAFMII, and do well in follow-up management by strictly following the self-regulation requirements.

Wrapping up the survey, NAFMII reminded companies of relevant matters such as business risks arising from the downward trend of the market, actively responding to the unfavorable conditions during the course of production and operation, operating prudently, and taking measures to cope with the weak downstream demand, industry overcapacity and price fluctuation risk; advised companies to implement the newly revised rules for information disclosure and relevant requirements on information disclosure management system for respective disclosure, and do well in follow-up management. For the future, NAFMII in its line of duty will continue to pay close attention to issuers’ implementation of relevant requirements on issuing paper and self-regulation when issuing non-financial enterprise debt financing instruments, follow the associated risks existent in various industries as well as the industry issuing debt financing instruments with profound interest, for the purpose of promoting the stable and healthy development of the inter-bank market and protecting the legitimate rights and interests of investors.