【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 the categories of 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 small and micro enterprises; and making the terms for green bonds and bonds supporting small and micro enterprises more flexible for the repayment of 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 bond 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 decentralization 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 bond 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 the overall bond issuance pace.

Macroeconomic Trends

In the first 11 months, nationwide issuance of new local bonds totals 46,740 billion 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. Refinance bonds totaled 1,209 billion yuan, with 63.9 billion yuan in general bonds and 1,145.1 billion yuan in special bonds. The total issuance of local government bonds reached 1,314.1 billion yuan, comprising 83.4 billion yuan in general bonds and 123.1 billion yuan in special bonds.

From January to November, new local government bonds issued amounted to 4,674 billion yuan, with 676.3 billion yuan in general bonds and 39,977 billion yuan in special bonds. Refinance bonds totaled 4,028 billion yuan, including 1,308.9 billion yuan in general bonds and 2,719.4 billion yuan in special bonds. The total local government bonds issued reached 8,702 billion yuan, with 1,985.2 billion yuan in general bonds and 6,717.1 billion yuan in special bonds.

State-owned Assets Supervision and Administration Commission: Working on guidelines for the adjustment and exit of lowest-tier management personnel and incompetence 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, 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 lowest-tier management adjustment and exit system for incompetence, as a clear requirement of the reform. The SASAC is currently working on relevant guidelines to strengthen policy guidance.

Regional Hotspots

Zhao Qingye, Director of Henan Provincial Finance Department: pushing for gradual reduction in the number of financing platforms and debt scale

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

Henan announces 169 approved special bond projects totaling 23.437 billion yuan

On December 27, Henan Provincial Finance Department announced the list of 169 projects approved in the sixth batch of 2024 special bonds (non-issuance projects). The total approved amount is 23.437 billion yuan, with public disclosure from December 27 to December 31, 2024.

Henan: 10.973 billion yuan in new local bonds secured in 2024

According to the Henan Provincial Finance Department, Henan actively sought additional local government bonds this year. As of now, the province has secured 10.973 billion yuan in new bonds, used for project construction (5.408 billion yuan), replenishing government funds (1.675 billion yuan), and debt risk mitigation (3.89 billion yuan). These funds supported 99 projects including the high-speed rail hub in Anyang and the Yin Xu Ruins Museum, while also helping to resolve implicit 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 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 Hangzhou completes issuance of 300 million yuan green corporate bonds at 3.15%

On December 27, Zhongyuan Hangzhou Financial Leasing Co., Ltd. completed a private placement of green corporate bonds for professional investors, second phase, with a scale of 300 million yuan and a rate of 3.15%, with a 5-year (3+2) term. 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 issues 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 (Phase 1, Product 1) 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 issuer has a AA+ credit rating from China Chengxin International. The funds will be used to repay maturing or callable bonds.

Xuchang Asset Management plans to issue 1 billion yuan 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 underwriters/manager being Guotai Junan Securities and Western Securities. The company’s registered capital is 2 billion yuan, wholly owned by Xuchang State-owned Capital Operation Group.

Bond Market Entities

Henan Gas Group rated AA+

On December 27, Henan Gas Group Co., Ltd. received a “AA+” credit rating from authoritative domestic rating agencies, 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, underwriters appointed

On December 27, Zhongzhou Water Holding Co., Ltd. announced a tender for underwriters for its non-public issuance of low-carbon transition bonds, with a proposed scale of up to 500 million yuan and a term not exceeding 5 years. The annual underwriting fee rate will not exceed 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. He previously worked at the Zhoukou municipal government office.

Market Sentiment

Non-marketized bond issuance: Chongqing Qianjiang Urban Construction 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, maturity pressure for non-financial credit bonds will mainly concentrate in March and April

Guojin Fixed Income research 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 approximately 10.32 trillion yuan, with 7.83 trillion yuan maturing and 2.49 trillion yuan in put-back. The peak periods are 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?

Urban investment bonds rated AA+ and AA will face significant maturity pressure. The maturity and put-back amounts for 2025 are: AAA (1.76 trillion yuan), AA+ (2.41 trillion yuan), AA (1.32 trillion yuan), and AA- or below (332 billion yuan). The proportion of these amounts relative to total bonds is 31%, 38%, 38%, and 32%, respectively.

What about industrial bonds in 2025?

Mid- to high-rated industrial bonds will also face considerable maturity pressure. The amounts are: AAA (4.07 trillion yuan), AA+ (520 billion yuan), AA (150 billion yuan), and AA- or below (49.3 billion yuan). The proportions are 37%, 41%, 38%, and 7%, respectively. The pressure mainly comes from central and state-owned enterprises, with the amounts for central SOEs, state-owned enterprises, private enterprises, and others being 2.16 trillion, 2.14 trillion, 270 billion, and 220 billion yuan, respectively, accounting for 36%, 36%, 30%, and 41% of total.

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

© Wenzhou Securities, all rights reserved

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