①Today, the first 50-year special government bond tender was issued, with a total issuance of 35 billion yuan. According to statistics, a total of 4 ultra-long-term special government bonds were issued in June; ②The phased issuance of special government bonds helps to smooth the impact on liquidity. From the perspective of this year's issuance, special government bonds are generally welcomed by investors; ③Special government bonds can increase the supply of long-term bonds, help improve the national debt yield curve, and attract more long-term funds into the market.
On June 14th, Cailian Press (reporter Wang Hong) reported that the first 50-year special national bond was tendered and issued today, with a total issue of 35 billion yuan. According to Cailian reporters, in June, a total of 4 super long-term special national bonds were issued, exceeding the number of 2 in May. Experts said that the issuance of special national bonds in batches helps to smooth the impact on liquidity. From the issuance situation this year, special national bonds are generally welcomed by investors.
Industry experts also pointed out that the issuance of super long-term special national bonds can increase the supply of safe assets and make the supply and demand relationship of the bond market more balanced. In the long run, special national bonds can increase the supply of long-term bonds, help improve the country's bond yield curve, and attract more long-term funds to enter the market, which has a positive impact on the long-term interest rate trend of the bond market.
Four special national bonds were issued in batches to smooth the impact on liquidity.
Today, the Ministry of Finance issued the first 50-year super-long-term special national bond, with a total amount of 35 billion yuan and a coupon rate determined by the underwriting group after competitive bidding. The tender will be distributed from the end of the tender to June 17, 2024, and will be listed for trading starting from June 19. In terms of interest payment and principal repayment, interest will be calculated from June 15, 2024, with interest paid every six months, and the principal will be repaid and the last interest will be paid on June 15, 2074.
In addition, the Ministry of Finance will also issue a 20-year super long-term special national bond on June 19 for the first time. This bond is a 20-year fixed-rate bond with a total issue of 45 billion yuan and a coupon rate of 2.49%, and will be issued through the Beijing Securities Exchange Government Bond Issuance System of the Ministry of Finance.
On June 7th, the Ministry of Finance tendered for the continuation of the 30-year super long-term special national bond in 2024, with a total amount of 45 billion yuan. According to the relevant arrangements, the 30-year super long-term special national bond will welcome its second continuation on June 21st.
In general, there were 4 super long-term special national bond issuances in June, compared to 2 in May.
Lou Feipeng, a researcher at China Postal Savings Bank, told Cailian reporters that the batch issuance of special national bonds is not only helpful for better implementation of the project, it also helps to smooth the impact on liquidity. "Especially at present, when liquidity is abundant, DR007 rate has been lower than the 7-day reverse repo rate of the central bank several times last week, which is more helpful to weaken the effect of special national bonds issuance on the fund side. Judging from the issuance situation of special national bonds this year, they are generally welcomed by investors."
CICC fixed income pointed out that the main buyers of super long-term bonds may be banks (about 70-80%), insurance (about 10-20%) and non-corporate products (about 10-20%). "This year's super long-term special national bonds are open to individual investors to purchase through counter business opening institutions. Due to the higher interest rates and better liquidity of super long-term special national bonds compared to time deposits, and the lower credit risk compared to other assets, it is expected that individual investors will have strong demand for super long-term national bonds."
According to the plan of the Ministry of Finance, the special national bonds with a total value of 1 trillion yuan planned to be issued this year are divided into three varieties: 20 years, 30 years, and 50 years, with a issuance period from mid-May to mid-November and a total of 22 issuances, mainly concentrated in the third quarter.
Can increasing the supply of safe assets promote the balance of supply and demand in the bond market?
Feng Lin, director of the research and development department of Dongfang Jincheng, told Cailian reporters that since this year, the supply of government bonds has been slow while the institutional allocation demand is strong, which has deepened the "asset drought" situation in the bond market and is an important reason for the long-term interest rate decline in the bond market. The quarterly monetary policy report released by the central bank also pointed out that "the long-term government bond yield mainly reflects expectations of long-term economic growth and inflation, and is also disturbed by the relative shortage of safe assets." "From this perspective, the issuance of super-long-term special national bonds can increase the supply of safe assets and make the supply and demand relationship of the bond market more balanced," Feng said that this will bring a certain upward pressure on market interest rates, thus under the background of the improvement of basic factors, support the long-term national bond yield to operate in a reasonable range matching the expectation of long-term economic growth.
Ming Ming, chief economist of CITIC Securities, told Cailian reporters that the issuance of special national bonds will increase the supply of bonds in the market and theoretically push up market interest rates. However, considering that the central bank is likely to provide sufficient liquidity support to hedge the impact of the special national bond issuance, we expect that interest rates will not undergo drastic adjustments. "In the long run, special national bonds can increase the supply of long-term bonds, help improve the country's bond yield curve, provide fund support for the implementation of major national strategies and the construction of key areas of security capabilities, enhance investors' confidence in the country's economic development, and provide more investment products for the market, attracting more long-term funds to enter the market," Ming said that special national bonds have a positive impact on the long-term interest rate trend of the bond market.
"Special national bond issuance can increase bond supply in the market and theoretically push up market interest rates; however, considering that the central bank is likely to provide sufficient liquidity support to hedge the impact of the special national bond issuance, we expect that interest rates will not undergo drastic adjustments," said Ming Ming, chief economist of CITIC Securities.
"In the long run, special national bonds can increase the supply of long-term bonds, help improve the country's bond yield curve, provide fund support for the implementation of major national strategies and the construction of key areas of security capabilities, enhance investors' confidence in the country's economic development, and provide more investment products for the market, attracting more long-term funds to enter the market," Mingming also pointed out that special national bonds have a positive impact on the long-term interest rate trend of the bond market.