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CN CBIRC: Controlling Annexation Loan Ratio Shall Not Exceed 70% of Transaction Price w/ Term Not Exceeding 10 Yrs in Principle
Recommend 29 Positive 54 Negative 18 |
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The China Banking and Insurance Regulatory Commission (CBIRC) publicly solicited opinions on the Management Measures for Annexation Loans by Commercial Banks (Draft for Comment) saying that commercial banks should comprehensively consider the risks of M&A transactions and annexation loans, and prudently determine the ratio of annexation loans to the transaction price, ensuring that the M&A funds include a reasonable proportion of equity capital to prevent high-leverage M&A financing risks. The ratio of controlling annexation loans to the transaction price should not exceed 70%, and the proportion of equity capital should not be less than 30%. For equity investment annexation loans, the ratio should not exceed 60%, and the equity capital should not be less than 40%. The term for controlling annexation loans should not exceed ten years in principle, while the term of equity investment annexation loans shall not exceed seven years in principle. AASTOCKS Financial News Website: www.aastocks.com |
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