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Chinese regulator demands CDS for new corporate bond issuance

Xiaochong Zhang and Noah Sin

BEIJING, April 17 (Reuters) - The China Securities Regulatory Commission (CSRC) has asked private enterprises to use credit default swaps (CDS) when issuing new bonds, to help companies struggling to raise funds to come to the market, several sources said on Wednesday.

However, companies rolling over old bonds will not be affected, the regulator is said to have instructed in an unofficial guidance.

"This guidance means that new issuance by private enterprises, new bonds will need to be matched (with CDS), regardless of the use of proceeds," said one source close to the Shanghai Stock Exchange.

(Reporting by Xiaochong Zhang; Writing by Noah Sin; Editing by Susan Fenton)