1. Formally speaking, public offering is to recruit unspecified investors after registration. Its issuance conditions are usually standardized so that non-specific investors can participate in the subscription. Directional issuance is to issue financial products to specific investors, and the negotiations between the issuer and investors are basically completed before registration.
2. The biggest difference between directional issuance and public issuance is that directional issuance further strengthens the independent consultation mechanism between issuers and investors, embodies the principles of marketization and freedom of contract, and is a higher level of market opening and market constraint.
3. In the design of negotiation mechanism, the issuer of directional issuance and the investors negotiated to determine the agreement of directional issuance. The terms in the agreement, such as interest rate, term, information disclosure method and refinancing, are more flexible and personalized, which is beneficial for issuers and investors to meet individual needs.
4. In terms of market pricing, the issue price, interest rate and related interest rate of non-public directional tools follow the self-discipline rules and are determined according to the market mode. Compared with publicly issued debt financing instruments, there is a certain liquidity premium.
5. In terms of restraint mechanism, non-public offering can give full play to the contractual awareness of market participants' independent negotiation, reduce prior control, no longer force credit rating, and leave some micro-responsibilities for risk prevention to investors for independent decision-making.
6. In terms of market development momentum, non-public issuance of targeted financing instruments does not specify the product structure in detail, encourages market members to innovate independently, and forms a sustainable market innovation momentum by guiding market participants to innovate spontaneously.
With the expansion of China's bond market, how to further improve the market function has become a key concern of relevant functional departments. According to the development experience of American bond market, the improvement of market function will mainly come from the optimization of market investor structure. Hierarchical and orderly investor structure can not only improve the efficiency of market operation, but also accommodate a variety of debt financing tools.
Non-public development tools play an important role in deepening market functions and improving market structure. The issuance of non-public directional financing instruments can attract risk-oriented investors such as private equity funds to enter the market, activate the trading enthusiasm of non-financial institutional investors, attract a large number of institutional investors to enter the non-public directional issuance market, further optimize the structure of market investors, gradually change the current situation of relatively concentrated institutional investors in the inter-bank market, and promote the improvement of market operation efficiency while cultivating multi-level investors.
Obviously, under the sound monetary policy environment, the private placement market and the public offering market will be two components that constitute the complementary and coordinated development of China's bond market, which will promote the continuous expansion of the proportion of direct financing in China and further promote the optimization of China's financing structure.