Following the relevant requirements of Order No. 56, the notice issued by the National Development and Reform Commission (NDRC) on 14 March 2024 (Notice) emphasizes the coordination of high-quality development and robust security measures, optimizes the foreign debt management of high-quality enterprises within the framework of current service guidelines, simplifies the relevant requirements and processes, enhances the applicable interim and post-implementation supervision mechanisms, and effectively prevents corporate foreign debt risks while facilitating cross-border investment and financing for enterprises. Key provisions of the Notice include:

1. Reasonably define the standards for high-quality enterprises

According to the Notice, enterprises that are currently receiving significant support must meet all of the following criteria:

1. The enterprise must comply with relevant regulations and requirements such as the Measures for the Review and Registration of Medium- and Long-term Foreign Debts of Enterprises.
2. The enterprise’s business activities must comply with national macro-control and industrial policies.
3. The enterprise’s main performance and financial indicators must demonstrate its leading position in the industry or region.
4. The enterprise’s international credit rating must be investment grade (BBB- or above) or its domestic credit rating must be AAA.
5. In the past three years, (1) there has been no default on domestic or foreign bonds and no continued delay in the payment of principal and interest, (2) there has been no major violation of laws and regulations, and the enterprise has not been included in any blacklist of untrustworthy entities, and (3) its financial statements have not received a negative opinion by a certified public accountant, nor has the accountant been unable to express an opinion, and in cases where a certified public accountant issues a qualified opinion, any significant impact related to the matters outlined in the qualified opinion have been rectified.

2. Simplify the relevant approval requirements and processes

According to the Notice, the approval requirements and procedures for foreign debt will be changed as follows:

1. High-quality enterprises that are subject to foreign debt approval and registration must undergo special approval to speed up the application process.
2. Enterprises can submit applications for planned consolidated foreign debt quotas, to encompass subsidiaries, allowing for a single application process for multiple debt issuances.
3. For enterprises that have obtained international commercial loans but are temporarily unable to provide a signed loan agreement, or that have issued overseas bonds but have not yet determined the lead underwriter, “remedial procedures are possible”. When an enterprise submits information to the NDRC after borrowing foreign debt, it should provide additional documentation, as required.
4. The legal opinions of professional institutions in the application documents of enterprises whose credit ratings meet certain conditions can be issued by the enterprise’s internal legal or compliance department.