【Cubic Bond Market Express】 2 Trillion Yuan Debt Replacement Issuance Launched This Year / Zhengzhou AA+ Platform Plans 1.5 Billion Yuan Bond Issuance / Two City Investment Platforms' Short-Term Financing Notes and Medium-Term Notes Exceeding 1 Billion Yuan to Launch Tomorrow

Issue 326

March 4, 2025

Focus Highlights

Work on the issuance of 20 trillion yuan of replacement bonds in 2025 has begun.

Luo Qinjian, spokesperson for the Third Session of the 14th National People’s Congress, stated that by the end of last year, the 20 trillion yuan quota for 2024 replacement bonds had been fully issued, with most regions completing the replacements. The work related to the issuance of 20 trillion yuan of replacement bonds in 2025 has already started. The Standing Committee of the National People’s Congress will, in accordance with relevant laws, strengthen supervision of government debt management, especially tracking and supervising the implementation of increasing local government debt limits and replacing existing hidden debts, to promote further strengthening of government debt management.

New Trend of 33 Trillion “Long-term Funds”: Insurance Funds Prefer Bonds in 2025

How will the 33 trillion yuan of insurance funds invest this year? Recently, the China Insurance Asset Management Industry Association released the 2025 Investor Confidence Survey Results. Among 120 participating insurance asset management institutions and insurance companies, bonds are the most preferred assets this year, followed by stocks and bank deposits.

Most insurance institutions expect asset allocation ratios in 2025 to remain basically consistent with 2024, with over half possibly moderately or slightly increasing investments in bonds and stocks.

New Trend of 33 Trillion “Long-term Funds”: Insurance Funds Prefer Bonds in 2025

Macroeconomic Developments

Ministry of Finance Plans to Issue 40 Billion Yuan of 28-Day Treasury Bonds

The Ministry of Finance announced plans to issue 2025 accounting discount (Thirteenth Series) treasury bonds (28 days). The total face value of the competitive bidding is 40 billion yuan, with additional bids from Class A members. The bonds will start accruing interest from March 6, 2025, and will be repaid at face value on April 3, 2025 (post-holiday). The bidding will take place on March 5, 2025.

PBOC Net Withdraws 280.3 Billion Yuan from the Market

On March 4, the People’s Bank of China conducted 382 billion yuan of 7-day reverse repurchase operations at a fixed rate of 1.50%, unchanged from previous. Due to 318.5 billion yuan of reverse repos maturing today, the central bank net withdrew 280.3 billion yuan.

Regional Hotspots

Shandong Province Plans to Issue 2.735 Billion Yuan of “Special” New Local Government Bonds

The Shandong Provincial Department of Finance announced plans to issue 2025 Shandong provincial government special bonds (Series II to VIII), totaling 47.67 billion yuan. Among these, the Series VIII “special” new bonds will fund multiple government investment projects, with a planned issuance of 2.735 billion yuan and a 10-year maturity. The bidding will be held on March 10, 2025, from 15:00 to 15:40.

Chongqing Plans to Issue 23.058 Billion Yuan of Refinance Special Bonds to Replace Hidden Debt

The Chongqing Municipal Finance Bureau disclosed that the 2025 Chongqing local government refinancing special bonds (Series IV to VII) will be issued with a total scale of 24.063 billion yuan, with maturities of 7 and 10 years. Of these, 23.058 billion yuan will be used to replace existing hidden debts, with bidding on March 11.

Jinan State-owned Assets Supervision and Administration Commission: Focus on Monitoring Urban Investment Company Debt and High-Interest Debt in 2025

The 2025 work plan of Jinan State-owned Assets Supervision and Administration Commission states that the main goals are: total assets of enterprises fulfilling investor responsibilities reaching 1.24 trillion yuan; operating income reaching 193 billion yuan; R&D expenditure of 3.439 billion yuan; and annual investment exceeding 90 billion yuan.

Accelerate asset revitalization. Clarify the assets of municipal enterprises, coordinate management and revitalization efforts, and complete “two books and one report.” Guide state-owned enterprises to comprehensively review assets with stable cash flow and predictable value, flexibly use structured financing tools such as asset-backed securities (ABS) and mortgage-backed securities (MBS), and carry out asset securitization to improve asset utilization efficiency.

Prevent and resolve debt risks. Strengthen asset-liability ratio control, focus on monitoring urban investment companies’ debt and high-interest debt, embedding supervision throughout the entire process of borrowing, using, managing, and repaying debt. Regulate overseas investment management of municipal enterprises and strictly control investments in high-risk overseas regions.

Issuance Updates

Henan Aviation Port Investment Group Completes 1.5 Billion Yuan Medium-term Notes at 2.74%

On March 4, it was announced that Henan Aviation Port Investment Group completed the issuance of 1.5 billion yuan of medium-term notes, with a rate of 2.74% and a 3-year term. The lead underwriter and bookrunner is Bank of Communications, with co-lead underwriters China Bank and Zhongyuan Bank. The funds will be used entirely to repay existing debt financing instruments.

Zhoukou Investment Group to Issue 830 Million Yuan Medium-term Notes Starting Tomorrow, Subscription Range 2.5%-3.5%

Zhoukou Investment Group announced that its 2025 first batch of medium-term notes will be issued from March 5 to March 6, with a subscription range of 2.50% to 3.50%. The issuance amount is 830 million yuan, with a 5-year term, and the funds will be used to repay maturing bank debt. The lead underwriter and bookrunner is Ping An Securities, with co-underwriter China CITIC Bank. As of July 26, 2024, the issuer’s credit rating is AA+ with a stable outlook, assessed by Dongfang Jincheng.

Pingdingshan Development Investment Group to Issue 233 Million Yuan Short-term Financing Bonds Starting Tomorrow, Subscription Range 1.7%-2.7%

Pingdingshan Development Investment Holding Group announced that its 2025 first batch of short-term financing bonds will be available for subscription from March 5, 09:00 to March 6, 18:00. The bond amount is 233 million yuan, with a 1-year maturity. The bonds will be issued at face value, with a subscription range of 1.70% to 2.70%. The interest start date is March 7, 2025, and the repayment date is March 7, 2026. On November 13, 2024, Dagong International rated the issuer’s credit at AA+, with no bond rating assigned for this issuance.

Zhengzhou High-tech Investment Holding Group plans to issue 1.5 billion yuan of perpetual corporate bonds, receiving feedback from the Shanghai Stock Exchange

Zhengzhou High-tech Investment Holding Group’s non-public offering of 1.5 billion yuan of perpetual corporate bonds for professional investors received feedback from the SSE. The underwriter and manager is CITIC Construction Investment. On July 26, 2024, the issuer’s credit rating was AA+ with a stable outlook, assessed by United Credit.

Zhumadian Huangmei Information Industry Investment plans to issue 700 million yuan of rural revitalization bonds, receiving feedback from the SSE

Zhumadian Huangmei Information Industry Investment’s non-public rural revitalization bonds project for professional investors has received feedback from the SSE. The bonds will be issued with a total amount of 700 million yuan, as private placement bonds, managed by Zhongde Securities. The company is a wholly owned subsidiary of Zhumadian Development Investment Group, which is affiliated with Zhumadian Industry Investment Group.

Henan Water Resources Investment Group completes issuance of 700 million yuan medium-term notes at 2.02%

Henan Water Resources Investment Group completed the issuance of 700 million yuan of medium-term notes, with a rate of 2.02% and a 5-year term. The lead underwriter is Shanghai Pudong Development Bank, with co-underwriters Huaxia Bank. According to Shanghai New Century Rating, the issuer’s credit rating is AAA. The funds will be used to repay existing interest-bearing liabilities.

Bond Market Entities

United International confirms Yingyang Urban Investment Group’s BBB international long-term issuer rating

On March 4, United International confirmed the BBB international long-term issuer rating for Yingyang Urban Development Investment Group Co., Ltd., with a stable outlook.

Leshan Urban Construction Investment seeks non-standard financing of no less than 50 million yuan, with an annual comprehensive cost not exceeding 7%

Leshan Urban Construction Investment Development (Group) Co., Ltd. announced plans to seek non-standard financing of at least 50 million yuan to supplement liquidity. The loan term should be no less than 1 year, with an annual comprehensive cost not exceeding 7%. They invite institutions to submit financing proposals within 5 working days, including but not limited to the financing entity, amount, term, cost, guarantee method, and other conditions.

Bond Market Sentiment

Zaozhuang Cultural and Tourism Development Group Vice General Manager Cao Bin under investigation

According to Zaozhuang Discipline Inspection and Supervision Commission, Cao Bin, deputy general manager and member of the Party Committee of Zaozhuang Cultural and Tourism Development Group Co., Ltd., is suspected of serious violations of discipline and law and is currently under disciplinary review and supervisory investigation.

Market Opinions

Can the ample liquidity persist? Bond market trends may unfold in three phases, with external pressures possibly influencing.

Despite the currently comfortable liquidity environment, market debate remains intense, centered on whether “liquidity can remain loose.” Many investors worry that the early-month easing mainly results from fiscal spending at the end of February, and with the PBOC’s open market operations (with 1.8 trillion yuan of reverse repos still outstanding as of February 28), liquidity could tighten again by Thursday or Friday.

Huaxi Macro Fixed Income Team believes that, under such concerns, bond market performance may also be divided into three phases.

The first phase involves minimal resistance and rapid recovery, likely in the first half of this week, characterized by a broad decline in yields.

The second phase involves confirming the sustainability of liquidity recovery and crossing key trading zones across different maturities (the dense trading points for 3, 5, 7, 10, and 30-year government bonds are approximately 1.30%, 1.40%, 1.65%, 1.70%, and 1.85%).

The third phase sees the yield curve continuing to approach previous lows.

Huaxi Macro Fixed Income team leans toward the view that external factors, especially overseas tariffs, mainly influence whether liquidity can sustain. Currently, it remains an observation phase. If an additional 10% tariff is imposed again on March 4, and tariffs on China from other countries escalate, the probability of liquidity easing increases, along with the likelihood of RRR cuts, potentially pushing bond markets into the second or third phase.

Editor: Tao Jiyan | Reviewer: Li Zhen | Supervisor: Wan Junwei

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