(Updates with bond prices in third paragraph.)
Oct. 11 (Bloomberg) -- China’s Ministry of Railways plans to sell 20 billion yuan ($3.1 billion) of bonds tomorrow, cutting taxes on interest income by 50 percent to lure investors back after a high-speed train accident hurt confidence.
The offer will include 10 billion yuan each of seven- and 20-year securities, according to a statement on the Chinese government bond clearing house’s website today. The Ministry of Finance said yesterday companies investing in railway bonds issued between 2011 and 2013 will have the levies on their interest earnings halved.
Ten-year borrowing cost for the rail operator, the nation’s biggest issuer of corporate debt, has jumped 51 basis points, or 0.51 percentage point, to 6.1386 percent since two high-speed trains collided on July 23 in the eastern city of Wenzhou. The ministry removed three top regional railway officials from their posts and suspended approvals on new projects nationwide, while 54 similar trains were recalled.
The ministry last sold bonds on Sept. 7, when it issued 5 billion yuan of five-year notes priced to yield 5.93 percent, according to data compiled by Bloomberg.
--Editors: Anil Varma, Sandy Hendry
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