Mainland companies issuing domestic market corporate bonds must be supported by People's Bank of China-approved guarantors, new rules issued yesterday stated. Analysts said the requirement was aimed at protecting retail investors from risk of default by issuers, a few of whom regarded debt paper as a quick and easy way to borrow from the public. The central bank said entities acting as guarantors must have net assets no less than the issuer's bond principal and interest, have a three-year track record of profitability and strong prospects, and must not be involved in restructuring or court cases. 'The need for companies to have guarantors for their issues will protect the interests of investors, most of whom are small buyers,' a Shanghai International Trust and Investment Co official said. Last year, local authorities allowed a poorly performing company in Wuhan to issue a corporate bond under a well-run subsidiary, only to see a default on repayment. Analysts said the new rules would prevent such incidents by insisting companies issuing the debt papers show proof of ability to repay principal and interest. In their applications, potential issuers will have to submit feasibility studies and risk assessments of projects, letters of guarantee from guarantors, credit assessment of debt issues, and legal papers. The rules will tighten control over brokerages acting as underwriters for the issuers by insisting those involved in such business obtain proper approval. Companies with approval to issue corporate bonds must publish details of the fund-raising exercise, and financial information about themselves, in approved newspapers 10 days before they are open for public subscription.