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About public funds compensation money exemption advanced redemption

Published 2016 years 03 month 14 Date

As a measure to reduce the burden of public debt costs, a system for “exemption of public fund compensation exemption” was introduced from FY Heisei 19. This is for the issue of bonds with an annual interest rate of 5% or more, the Ministry of Finance will exempt compensation from local governments that have formulated public enterprise restoration plans, and will respond to collective redemption. Of the simple water business bonds redeemed in the special account, 56 borrowed from FY Showa 2 to FY Heisei 6 is applicable.
The use of this system, and made a collective redemption and refinancing the bond issuance that are borrowing at an interest rate 6.0% or more of the high interest rates, is expected to interest burden of about 7 million yen is reduced.

Content and planning of the system are as follows.

1. System summary
(1) Fiscal Loan Fund, Kampo funds, out of the public enterprises Finance Corporation funds, for local government bonds of high interest rates, fiscal consolidation Kakei image-public enterprises Business Revitalization and contents of the reduction of the cost of labor costs, such as thorough planning formulated, targeting local governments to carry out administrative reform and management reform, in 19 year from fiscal 3 year, is the institutional admit the accelerated redemption of "no compensation".
As financial resources of (2) early redemption, can be issued by refunding borrowing by public enterprises Finance Corporation funds and banks, etc. funds.
(3) accelerated the scope of redemption is usually out of the accounting debt and public enterprise debt (simple water project bonds in the case of Hon), part of the interest rate more than 5% of those (depending on the financial capability and public enterprises capital costs, etc. target range, more than 5%, 6% or more, has been more than 7% and the step-by-step set.)

2. Early Redemption Amount Subject, etc. (redemption plan of H19 ~ 20)
 ○ Simple water supply business bonds (6 cases)
  ・ Total prepayment amount of about 3 million yen
  ・ Reward exemption amount of about 7100 million yen

3. The development of public enterprises Business Revitalization Plan pertaining to public funds compensation money exemption advanced redemption
As an conditions of early redemption, it established a "public enterprises Business Revitalization Plan" in the tap special accounts, apply to the country in March 19 year 9 month, was approved in March 19 year 12 month.

4. Explanation to Congress
· H19.12. 6 report to Congress all Council (overview)
· H20.12.14 H19 year the passage of the redemption amount of the supplementary budget
The passage of · H20.3.21 H20 year redemption amount of the budget proposal

【Glossary】

  • Public funds: Funds borrowed from the national government and public institutions. (Former Fund Management Department Fund, Former Simple Life Insurance Fund, Japan Finance Corporation for Municipal Enterprises)
  • Advance redemption: Repayment of the redemption balance before the redemption deadline.
  • Compensation exemption (no compensation): In order to redeem public funds in advance, you must pay compensation of about 80% of the unredeemed interest balance, but exemption from this compensation.
  • Refinancing (refinancing bonds): Changing the redemption balance of local bonds borrowed at high interest rates to low interest rate borrowings.
  • Municipal bonds: Borrowings of local governments.
  • Bank funds: Private funds such as banks, credit unions, credit unions, JA, etc. 

 

Public enterprises Revitalization Plan associated with public funds compensation money exemption [PDF: 264KB]
H20 public enterprises health plan follow-up [PDF: 271KB]
H21 public enterprises health plan follow-up [PDF: 272KB]
H22 public enterprises health plan follow-up [PDF: 309KB]
H23 public enterprises health plan follow-up [PDF: 316KB]

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