【Cubic Bond Market Channel】Henan Publicizes 169 Special Bond Projects That Passed Review / Special Category Corporate Bonds Expand / Zhongzhou Water Services Selects Underwriters for 500 Million Yuan Corporate Bond

Issue 288

December 27, 2024

Focus Highlights

Shanghai, Shenzhen, Beijing, and North Exchange revise special product corporate bond guidelines

On December 27, Shanghai, Shenzhen, Beijing, and North Exchange respectively revised and issued guidelines for special product corporate bonds. The updates emphasize targeted support for technological innovation, expanding the scope of issuers in tech innovation bonds, including those in sci-tech investment and incubation. They also increase financing support for key sectors and high-quality enterprises, broaden the eligible issuers for rural revitalization bonds and short-term corporate bonds, and expand the use of funds raised by bonds supporting small and micro enterprises, with more flexible terms for green bonds and bonds supporting small and micro enterprises to replace prior self-raised funds.

Shanghai, Shenzhen, Beijing, and North Exchange revise special product corporate bond guidelines

Shanghai Clearing House extends full settlement service deadline to December 31

On December 27, Shanghai Clearing House announced that, in accordance with the People’s Bank of China’s requirements for year-end settlement work, the full settlement service for bonds on December 31, 2024, will be extended from 5:00 PM to 6:00 PM.

11 regions pilot “self-review and self-issuance” of special debt projects; bond issuance pace to accelerate next year

Recently, the General Office of the State Council released the “Opinions on Optimizing and Improving the Management Mechanism of Local Government Special Bonds,” highlighting the delegation of project review authority. Guangdong, Jiangsu, and other 11 provinces and cities are among the first to pilot “self-review and self-issuance” of special debt projects. Liu Yu, Chief Economist at Huaxi Securities, analyzed that under this model, issuance no longer requires approval from the National Development and Reform Commission or the Ministry of Finance. Delegating review authority allows provinces to independently allocate funds, improving issuance and utilization efficiency, which will accelerate overall bond issuance.

Macroeconomic Trends

In the first 11 months, nationwide issuance of new local bonds reaches 46.74 trillion yuan

According to the Ministry of Finance, in November 2024, the country issued 105.1 billion yuan in new bonds, including 19.5 billion yuan in general bonds and 85.6 billion yuan in special bonds. Refinanced bonds totaled 1.209 trillion yuan, with 63.9 billion yuan in general bonds and 1.145 trillion yuan in special bonds. Total local government bonds issued amounted to 1.3141 trillion yuan, comprising 83.4 billion yuan in general bonds and 123.07 billion yuan in special bonds.

From January to November, new local bonds issued totaled 4.674 trillion yuan, with 676.3 billion yuan in general bonds and 39.977 trillion yuan in special bonds. Refinance bonds reached 4.0283 trillion yuan, including 1.3089 trillion yuan in general bonds and 2.7194 trillion yuan in special bonds. The total local government bonds issued in the period amounted to 8.7023 trillion yuan, with 1.9852 trillion yuan in general bonds and 6.7171 trillion yuan in special bonds.

State-owned Assets Supervision and Administration Commission: Working on guidelines for management personnel adjustments and exit procedures for underperformers

On December 27, Gou Ping, Member of the Party Committee and Deputy Director of the State-owned Assets Supervision and Administration Commission (SASAC), stated at the fourth special promotion meeting for deepening SOE reform in 2024 that by the end of 2025, most SOEs will implement management personnel adjustments and exit systems for underperformers, as part of the reform’s clear requirements. SASAC is currently studying and drafting relevant work guidelines to strengthen policy guidance.

Regional Hotspots

Henan Provincial Finance Department Director Zhao Qingye: Promoting gradual reduction of the number and debt scale of financing platforms

On December 26, Zhao Qingye, Secretary of the Party Leadership Group and Director of Henan Provincial Finance Department, said in an interview that in 2025, the province’s financial system will fully implement more proactive fiscal policies, continue efforts, and increase support to promote sustained economic recovery. They will leverage the central government’s policy to replace existing implicit debt, gradually reduce hidden debt, and decrease the number and scale of financing platforms year by year.

Henan announces 169 approved special debt projects totaling 23.437 billion yuan

On December 27, Henan Provincial Finance Department announced the sixth batch of approved special bond projects for 2024 (non-issuance projects). A total of 169 projects were approved, with a total application amount of 23.437 billion yuan. The public notice runs from December 27 to December 31, 2024.

Henan’s 2024 additional local bonds reach 10.973 billion yuan

According to the Henan Provincial Finance Department, Henan has actively sought additional local government bonds this year. As of now, the province has secured 10.973 billion yuan in new bonds, used for projects including 5.408 billion yuan for construction, 1.675 billion yuan to supplement government funds, and 3.89 billion yuan to resolve debt risks. These funds support projects such as the high-speed rail hub in Anyang and the Yin Ruins Museum, while also effectively reducing hidden debt risks.

Issuance Updates

Xuchang Investment Group completes issuance of 220 million yuan medium-term notes, at 2.85% interest

On December 27, Xuchang Investment Group Co., Ltd. announced the completion of its 2024 second tranche of medium-term notes.

The bonds are named “24Xuchang Investment MTN002,” with a scale of 220 million yuan, interest rate of 2.85%, and a 5-year term. The lead underwriter is Bank of Communications, with Postal Savings Bank and Guoxin Securities as joint underwriters. The issuer’s credit rating is AA+. Funds raised will be used to repay existing debt financing instruments.

Zhongyuan Hangzhou completes issuance of 300 million yuan green corporate bonds, at 3.15% interest

On December 27, Zhongyuan Aviation Leasing Co., Ltd. completed a private placement of green corporate bonds for professional investors, second phase, in 2024.

The bonds are named “G24 Zhonghang 2,” with a scale of 300 million yuan, interest rate of 3.15%, and a 5-year (3+2) term. Underwriters include Changjiang Securities, Western Securities, and Shenwan Hongyuan Securities. The issuer’s credit rating is AA+. Funds will be used to repay bank loans invested in green industry projects.

Luoyang Urban-Rural Construction Investment Group completes issuance of 120 million yuan corporate bonds, at 2.38% interest

On December 27, Luoyang Urban-Rural Construction Investment Group Co., Ltd. completed a private placement of 2024 corporate bonds (Phase 1, Product 1).

The bonds are named “24Luoyang Construction 01,” with a scale of 120 million yuan, interest rate of 2.38%, and a 3-year term. Underwriters are Haitong Securities and GF Securities. The bonds have a credit rating of AA+ from China Chengxin International. Funds will be used to repay maturing or callable bonds.

Xuchang Asset Management plans to issue 1 billion yuan of corporate bonds, accepted by SZSE

On December 27, Xuchang Asset Management Co., Ltd.'s 2024 private placement of corporate bonds was accepted by the Shenzhen Stock Exchange. The proposed issuance amount is 1 billion yuan, with Guotai Junan and Western Securities as underwriters/manager. The company has a registered capital of 2 billion yuan and is a wholly owned subsidiary of Xuchang State-owned Capital Operation Group.

Bond Market Entities

Henan Gas Group rated AA+ in creditworthiness

On December 27, after evaluation by authoritative domestic credit rating agencies, Henan Gas Group Co., Ltd. received a “AA+” credit rating with a stable outlook. The company was established on October 26, 2023, with a registered capital of 10 billion yuan, wholly owned by Henan Investment Group.

Zhongzhou Water plans to issue 500 million yuan low-carbon transition-linked bonds, selects underwriters

On December 27, Zhongzhou Water Holding Co., Ltd. announced a tender for underwriters for its non-public issuance of low-carbon transition-linked bonds. The deadline for bids is January 20, 2025, at 14:30. The bonds will not exceed 500 million yuan, with a term of up to 5 years, and an annual underwriting fee rate not exceeding 0.2%. The issuer’s credit rating is AA+.

Mu Huitao appointed General Manager of Zhoukou Investment Group

On December 26, Zhoukou Investment Group Co., Ltd. announced that, after research by the Party Committee and resolution by the Board of Directors, Mu Huitao was appointed as General Manager. Mu Huitao previously worked at the Zhoukou Municipal Government Office.

Market Sentiment

Non-marketized bond issuance: Chongqing Qianjiang Urban Investment receives warning letter

On December 27, it was reported that due to non-marketized issuance of corporate bonds, the Chongqing Securities Regulatory Bureau issued a warning letter to Chongqing Qianjiang Urban Construction Investment (Group) Co., Ltd.

Market Opinions

Guojin Fixed Income: Next year, non-financial credit bond maturities concentrated in March and April

Guojin Fixed Income team analyzed that in 2025, the maturity pressure for non-financial credit bonds will mainly occur in March and April. Using the outstanding bonds as of December 23, 2024, the total maturity and put-back amount in 2025 is estimated at 10.32 trillion yuan, with 7.83 trillion yuan maturing and 2.49 trillion yuan in put-back. The pressure peaks in March and April, with maturities of 1.37 trillion and 1.24 trillion yuan respectively.

What is the maturity pressure for urban investment bonds in 2025?

In 2025, bonds rated AA+ and AA for urban investment will face significant maturity and redemption pressure. The amounts are 1.76 trillion yuan for AAA, 2.41 trillion yuan for AA+, 1.32 trillion yuan for AA, and 332 billion yuan for AA-. The proportion of these maturities relative to total bonds is approximately 31%, 38%, 38%, and 32%, respectively.

What about industrial bonds in 2025?

Industrial bonds rated AAA, AA+, AA, and AA- will also face notable maturity pressures, totaling 4.07 trillion, 520 billion, 150 billion, and 493 billion yuan respectively. The proportions are roughly 37%, 41%, 38%, and 7%. The pressure is mainly concentrated among central and state-owned enterprises, with 2.16 trillion yuan for central SOEs, 2.14 trillion for state-owned enterprises, 270 billion for private enterprises, and 220 billion for others. The majority of the pressure stems from central and state-owned entities.

Editor: Shi Jian | Reviewer: Li Zhen | Supervising Editor: Wan Junwei

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