【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 Corporate Bond Guidelines

On December 27, Shanghai, Shenzhen, Beijing, and North Exchange respectively revised and issued guidelines for special corporate bond products. The updates emphasize strengthening targeted support for technological innovation, expanding the scope of issuers for tech innovation bonds in categories such as sci-tech investment and incubation; increasing financing support for key sectors and high-quality enterprises; broadening the eligible issuers for rural revitalization bonds and short-term corporate bonds; expanding the use of funds for supporting bonds for small and micro enterprises; and making the maturity arrangements for green bonds and bonds supporting small and micro enterprises more flexible to better accommodate prior self-raised funds.

Shanghai, Shenzhen, Beijing, and North Exchange Revise Special Corporate Bond Guidelines

Shangqing Exchange: Extends Full Settlement Service Time for December 31 Bonds to 6:00 PM

On December 27, Shangqing Exchange announced that, in accordance with the People’s Bank of China’s requirements for year-end settlement work, the full settlement service for bonds maturing 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; Debt 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 ten other 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, thereby accelerating the overall debt issuance pace.

Macroe Developments

National Local Debt Issuance Reached 46.74 Trillion Yuan in the First 11 Months

According to the Ministry of Finance, in November 2024, new bonds issued nationwide totaled 1.051 trillion yuan, including 195 billion yuan in general bonds and 856 billion yuan in special bonds. Refinanced bonds amounted to 12.09 trillion yuan, with 639 billion yuan in general bonds and 11.451 trillion yuan in special bonds. Total local government bonds issued reached 13.141 trillion yuan, comprising 834 billion yuan in general bonds and 12.307 trillion yuan in special bonds.

From January to November, new local government bonds issued totaled 46.74 trillion yuan, with 6.763 trillion yuan in general bonds and 39.977 trillion yuan in special bonds. Refinanced bonds totaled 40.283 trillion yuan, including 1.308 trillion yuan in general bonds and 2.719 trillion yuan in special bonds. The total local government bonds issued amounted to 87.023 trillion yuan, with 19.852 trillion yuan in general bonds and 67.171 trillion yuan in special bonds.

State-owned Assets Supervision and Administration Commission: Working on Guidelines for Management and Exit of Senior Management in State-Owned Enterprises

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 reform of state-owned enterprises in 2024 that by the end of 2025, most SOEs will implement the management personnel tiered adjustment and exit system. SASAC is currently studying relevant work guidelines to strengthen policy guidance.

Regional Highlights

Zhao Qingye, Director of Henan Provincial Finance Department: Promoting Year-by-Year Reduction in Number and Debt of Financing Platforms

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

Zhao Qingye, Director of Henan Provincial Finance Department: Promoting Year-by-Year Reduction in Number and Debt of Financing Platforms

Henan Publicly Announces 169 Approved Special Debt Projects Worth 23.437 Billion Yuan

On December 27, Henan Provincial Finance Department announced the sixth batch of approved special bond projects for 2024 (non-prospectus 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.

23.437 Billion Yuan! Henan Announces 169 Approved Special Debt Projects

Anyang City: Secures 10.973 Billion Yuan in New Local Government Bonds in 2024

According to the Anyang Municipal Finance Bureau, this year, the city actively sought additional local government bond funds. To date, a total of 10.973 billion yuan in new local bonds has been secured, including 5.408 billion yuan for project construction, 1.675 billion yuan to replenish government funds, and 3.89 billion yuan to resolve debt risks. These funds supported 99 projects such as the high-speed rail transportation hub and Yin Xu Ruins Museum, and effectively helped mitigate the city’s hidden debt risks.

Issuance Updates

Xuchang Investment Group Completes Issuance of 220 Million Yuan Medium-Term Notes at 2.85%

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, a rate of 2.85%, and a term of 5 years. The lead underwriter is Bank of Communications, with co-underwriters Postal Savings Bank and Guoxin Securities. The issuer’s credit rating is AA+. The funds raised will be used to repay existing debt financing instruments.

Zhongyuan Aviation Leasing Completes Issuance of 300 Million Yuan Green Corporate Bonds at 3.15%

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

The bonds are named “G24Zhonghang2,” with a scale of 300 million yuan, a rate of 3.15%, and a term of 5 (3+2) years. Underwriters include Changjiang Securities, Western Securities, and Shenwan Hongyuan Securities. The issuer’s credit rating is AA+. The proceeds will be used to repay bank loans for green industry projects.

Luoyang Urban-Rural Construction Investment Group Completes Issuance of 120 Million Yuan Corporate Bonds at 2.38%

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

The bonds are named “24LuoJian01,” with a scale of 120 million yuan, a rate of 2.38%, and a 3-year term. Underwriters are Haitong Securities and GF Securities. The bonds are rated AA+ by Zhongxin International. The funds will be used to repay maturing or callable bonds.

Xuchang Asset Management Plans to Issue 1 Billion Yuan in Corporate Bonds, Accepted by Shenzhen Stock Exchange

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

Market Entities

Henan Gas Group Receives AA+ Credit Rating

On December 27, after evaluation by authoritative domestic credit rating agencies, Henan Gas Group Co., Ltd. successfully received an “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 to Issue 500 Million Yuan Low-Carbon Transition-Linked Bonds, Underwriter Selected

On December 27, Zhongzhou Water Holding Co., Ltd. announced a tender for the non-public issuance of low-carbon transition-linked bonds. The deadline for bids is 14:30 on January 20, 2025. The bonds will be issued in a consortium, with a scale not exceeding 500 million yuan, 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 group’s Party Committee and resolution by the Board of Directors, Mu Huitao was appointed as General Manager. Mu Huitao previously worked at 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 practices, the Chongqing Qianjiang Urban Construction Investment (Group) Co., Ltd. received an administrative warning from the Chongqing Securities Regulatory Bureau.

Market Opinions

Guojin Fixed Income: Next Year, Maturity Pressure for Non-Financial Credit Bonds Mainly in March-April

Guojin Fixed Income team analyzed that in 2025, the maturity pressure for non-financial credit bonds will mainly concentrate in March and April. Since redemption and put options are the primary repayment types, the total maturity and put-back amounts are used to gauge pressure. Based on December 23, 2024, outstanding credit bonds, the total maturity and put-back amount in 2025 is approximately 10.32 trillion yuan, with 7.83 trillion yuan maturing and 2.49 trillion yuan in put-back. The peak pressure occurs in March and April, with maturities and puts of 1.37 trillion and 1.24 trillion yuan respectively.

What is the Maturity Pressure for Urban Investment Bonds in 2025?

In 2025, urban investment bonds rated AA+ and AA face significant maturity pressure. The maturity and put-back amounts for bonds rated AAA, AA+, AA, and AA- and below are 1.76 trillion, 2.41 trillion, 1.32 trillion, and 332 billion yuan respectively, accounting for 31%, 38%, 38%, and 32% of their outstanding bonds.

What about Industry Bonds in 2025?

Industry bonds rated AAA, AA+, AA, and AA- and below face notable maturity pressure. The amounts are 4.07 trillion, 520 billion, 150 billion, and 49.3 billion yuan respectively, representing 37%, 41%, 38%, and 7% of their outstanding bonds. The pressure mainly stems from central and state-owned enterprises, with total maturities and puts of 2.16 trillion, 2.14 trillion, 270 billion, and 220 billion yuan respectively, accounting for 36%, 36%, 30%, and 41%. The pressure is more concentrated on central and state-owned enterprise issuers.

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

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