It is a fund to smooth the government's stock debt, and it is a flexible stock-debt conversion model. Equity funds are used to replace some local bonds with high interest rates and short maturities. After the fund repays the stock loan to the stock project through bank loan, this part of the debt will be converted into project equity.

The advantage of the fund over the loan is that it has a long term, does not need mortgage guarantee, and only needs the government and investors to subscribe for the inferior part, but the capital cost will definitely not come down, and it can only be used for projects that replace a class of government debts.

Create background

In order to maintain GDP growth, although local governments are heavily in debt, land finance is unsustainable, and the high interest financing of government platform companies in previous years has caused great pressure on interest payment. After counting the debt scale of local governments around 20 14, the central government launched a bond swap plan to replace the high-interest financing of local governments in previous years with long-term low-interest funds.

However, the funds directly provided by the central government and provinces and cities are limited, for the smooth turnover of local bonds and in response to the central government's bond replacement concept of "replacing high with low and replacing long with short".

At the same time, actively explore new ways of playing PPP mode. Many private and state-owned capitals that dare not invest in the real economy have set up some equity funds with local government platform companies to replace local debts or provide early start-up funds for PPP projects. This is the background of the smooth launch of the fund.