In the first five months of this year, a total of 2,671.9 billion yuan of urban investment bonds were issued
[ad_1]
Since the beginning of this year, the overall urban investment bond financing environment has picked up. According to data from Flush, from January to May, a total of 2,671.9 billion yuan of urban investment bonds were issued, a year-on-year increase of 24%.
In the past May, a total of 408 urban investment bonds were issued, with a scale of 253.539 billion yuan. The scale of financing has declined from the peak in March this year, but still increased by 17.4% compared with the same period last year. Data show that in March 2023, a total of 1,166 urban investment bonds of various types were issued, with an issuance scale of 811.842 billion yuan, a year-on-year increase of 50% and 46%, and a month-on-month increase of 96% and 97% respectively. In April, a total of 726.012 billion yuan of urban investment bonds were issued, 542.587 billion yuan was repaid, and the net financing was 183.353 billion yuan.
In this regard, Li Huijie, director of research and development of China Securities Pengyuan, said in an interview with “Economic Information Daily” that the scale of urban investment bonds issued this year has shown a relatively high year-on-year growth. In Li Huijie’s view, there are three main reasons for the substantial increase in the issuance of urban investment bonds this year.
First of all, due to the impact of strict supervision at the end of 2021, the issuance scale of urban investment bonds in 2022 will be relatively low. From January to May 2022, the issuance scale of urban investment bonds was 2,160.2 billion yuan, a year-on-year decrease of 7%, especially private equity corporate bonds, which fell by 22% year-on-year. From January to May this year, private equity corporate bonds issued 904.5 billion yuan, a year-on-year increase of 68%, which is an important factor driving the growth of urban investment bond issuance scale.
Secondly, due to the large scale due this year, the demand for borrowing new and repaying old loans has increased. From January to May this year, the repayment scale of urban investment bonds reached 1,902.3 billion yuan, a substantial increase of 35% year-on-year. The increase in the demand for borrowing new ones to repay the old led to an increase in the issuance scale of urban investment bonds, which can also be confirmed by the increase in the issuance scale of short-term financing, which is dominated by rolling issuance. From January to May, the issuance scale of short-term financing was 703.4 billion yuan, an increase of 29% year-on-year, while the issuance of short-term financing remained basically stable in the same period last year.
In addition, since November last year, market interest rate fluctuations have delayed the issuance of urban investment bonds until March this year when interest rates fell. This part of the demand was released intensively, resulting in a significant increase in the issuance scale in March and April this year.
On the one hand, there is a surge in circulation, and on the other hand, there is a decline in the issue price. Huafu fixed income statistics show that due to the impact of the “wealth management redemption wave” on the bond market, the coupon rate of urban investment bonds has continued to rise since November 2022, and has basically come to an end with the bond market shock. In January this year, the weighted average coupon rate of newly issued urban investment bonds began to decline after reaching a peak of 4.54%. It fell back to 4.22% and 4.35% in February and March, but it is still nearly 90bps lower than the previous low in October 2022. gap.
The increase in the issuance of urban investment bonds has also aroused market participants’ concerns about risks. Recently, a rumor has aroused great concern in the market, and the exchange promptly publicly refuted the rumor and clarified, saying that the review policy of Chengtou’s bond issuance is generally stable.
Some brokerage analysts said that the exchange review is normal, and the risk of my country’s urban investment bond market is controllable. “We maintain confidence in the Chengtou market. The probability of a substantial default in the Chengtou open bond market is low, and the overall risk is within a controllable range,” said an analyst at the brokerage.
“We believe that the large increase in the issuance of urban investment bonds this year is not due to the relaxation of issuance policies. In fact, the prevention and resolution of local government debt risks has been in full swing, and the red line cannot be broken. Any loosening. Therefore, the market should not over-interpret the phased increase in the scale of urban investment bond issuance.” Li Huijie said.
[ad_2]
Source link
