GUANGZHOU - Guangdong's sale of 14.8 billion yuan ($2.4 billion) in local government bonds, the first batch issued and to be repaid by local authorities nationwide, was well received.

Guangdong helps kick off new era

Local governments 'need to refinance debt'

The bustling southern province on Monday auctioned five-year, seven-year and 10-year local government bonds at 3.84-percent, 3.97-percent and 4.05-percent yields, basically flat with comparable treasuries on the secondary market.

The bonds were 1.85 times oversubscribed.

"It was a good start," said Li Xudong, head of the research institute under the Guangdong provincial department of finance. "This has sent out a clear signal that China's local government debts will be managed in a transparent and responsible manner."

The oversubscription and low yields showed that investors have confidence in bonds directly issued by the local government, said Yuan Ji, chief analyst with Guangzheng Hang Seng Advisory.

The debts issued by Guangdong have received the top-notch triple-A rating from a ratings agency in Shanghai.

In the past, China's Ministry of Finance issued and repaid all local government debts. Last month, the State Council, or the cabinet, approved 10 regions to directly float and repay local government bonds in 2014 in a pilot program.