【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 targeted support for technological innovation, expanding the scope of issuers in tech innovation bonds, including those in the science and technology investment and incubation sectors; increasing financing support for key areas 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 repayment terms for green bonds and bonds supporting small and micro enterprises more flexible to better match the expenditure of prior self-raised funds.

Shanghai, Shenzhen, Beijing, and North Exchange Revise Special 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-Issue” 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 decentralization of project review authority. Guangdong, Jiangsu, and other 11 provinces and cities are among the first to pilot “self-review and self-issue” for 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 Local Government Bonds Issued New Additions of 46,740 Billion Yuan

According to the Ministry of Finance, in November 2024, new bonds issued nationwide totaled 105.1 billion yuan, including 19.5 billion yuan in general bonds and 85.6 billion yuan in special bonds. Refinance bonds amounted to 1.209 trillion yuan, with 63.9 billion yuan in general bonds and 1.1451 trillion yuan in special bonds. Total local government bonds issued reached 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 government bonds totaled 4.674 trillion yuan, with 676.3 billion yuan in general bonds and 39.977 trillion yuan in special bonds. Refinance bonds totaled 4.0283 trillion yuan, including 1.3089 trillion yuan in general bonds and 2.7194 trillion yuan in special bonds. Overall, local government bonds issued 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 Adjustment and Unsuitability Exit 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 state-owned enterprises will implement management personnel adjustment and exit systems for unsuitability, as part of the reform’s clear requirements. SASAC is currently studying and drafting relevant work guidelines to strengthen policy guidance.

Regional Hotspots

Zhao Qingye, Director of Henan Provincial Finance Department: Promoting Year-by-Year Reduction in 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, 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. 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 Publicizes 169 Approved Special Debt Projects Worth 23.437 Billion Yuan

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

Henan: 10.973 Billion Yuan in New Local Government 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 transportation hub in Anyang and the Yin Ruins Museum, while effectively reducing 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 medium-term notes.

The bond, named “24Xuchang Investment MTN002,” has a scale of 220 million yuan, an interest rate of 2.85%, and a maturity 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 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, second phase, with a scale of 300 million yuan, interest rate of 3.15%, and a term of 5 (3+2) years. The underwriters are 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 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 one, with a scale of 120 million yuan, interest rate of 2.38%, and a 3-year term. The 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 Shenzhen Stock Exchange

On December 27, Xuchang Asset Management Co., Ltd. applied for a private placement of corporate bonds for professional investors, with a proposed issuance of 1 billion yuan. The underwriters are Guotai Junan and Western Securities. The company’s registered capital is 2 billion yuan, and it is a wholly owned subsidiary of Xuchang State-owned Capital Operation Group.

Bond Market Entities

Henan Gas Group Receives AA+ Credit Rating

On December 27, Henan Gas Group Co., Ltd. was awarded an “AA+” credit rating by 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 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 selection of underwriters for its non-public issuance of low-carbon transition-linked bonds. Bidding closes on January 20, 2025, at 14:30. The proposed issuance scale is up to 500 million yuan, with a term not exceeding 5 years, and an annual underwriting fee rate not exceeding 0.2%. The issuer has a credit rating of 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-Market-Based Bond Issuance: Chongqing Qianjiang Urban Investment Receives Warning Letter

On December 27, it was reported that due to non-market-based issuance of corporate bonds, the Chongqing Qianjiang Urban Construction Investment (Group) Co., Ltd. received an administrative warning letter from the Chongqing Securities Regulatory Bureau.

Market Opinions

Guojin Fixed Income: Maturity Pressure for Non-Financial Credit Bonds Mainly in March-April 2025

Guojin Fixed Income research team analyzed that in 2025, non-financial credit bonds will face significant maturity pressure mainly in March and April. The main measure of maturity pressure is the sum of the amount due and the amount entering the put-back period. Based on the December 23, 2024, stock of credit bonds, the total maturity and put-back amount in 2025 is approximately 10.32 trillion yuan, with 7.83 trillion yuan due and 2.49 trillion yuan in put-back. The peak months are March and April, with 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 issued by urban investment companies will face substantial maturity. The amounts due and put-back for AAA, AA+, AA, and AA- and below rated bonds are 1.76 trillion, 2.41 trillion, 1.32 trillion, and 332 billion yuan respectively, representing 31%, 38%, 38%, and 32% of their stock. The pressure is mainly on AA+ and AA rated bonds.

What About Industry Bonds in 2025?

Industry bonds rated AAA, AA+, AA, and AA- and below will also face significant maturity. The amounts due and put-back are 4.07 trillion, 520 billion, 150 billion, and 493 billion yuan respectively, accounting for 37%, 41%, 38%, and 7% of their stock. The pressure is mainly on bonds issued by central and state-owned enterprises, with amounts of 2.16 trillion, 2.14 trillion, 270 billion, and 220 billion yuan respectively, representing 36%, 36%, 30%, and 41%. The main pressure is on bonds issued by central and state-owned enterprises.

Editor: Shi Jian | Review: Li Zhen | Supervision: Wan Junwei

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