Review of credit bond issuance in the first quarter of 2024###
This paper reviews the issuance of credit bonds in the first quarter of 2024 and the issuance of Zhongcheng Investment bonds, and compares the issuance of bonds from 2021 to 2023, and analyzes them from the perspectives of issuance and maturity, interbank and exchange, public and private placement, maturity division, and rating classification.
The statistical criteria of credit bonds include short-term financing bonds, medium-term notes, directional instruments, project revenue notes, corporate bonds and corporate bonds, excluding financial bonds.
1. Overview of issuance in the first quarter
(1) Issuance and expiration
In the first quarter of 2024, the total issuance of credit bonds was RMB3,523.8 billion, an increase of RMB331.1 billion or 10.37% year-on-year, the maturity increased by RMB167.0 billion over the same period last year, and the net financing increased by RMB164.1 billion over the same period last year.
In the first quarter, the bond market sentiment was hot, yields fell gradually, and issuers strengthened their willingness to extend the duration of their debts, reducing short-term financing and increasing medium- and long-term financing. In terms of bond types, the issuance of short-term financing bonds decreased by 13.55% compared with last year, and the issuance of medium-term bills increased by 76.35% compared with last year. Affected by policy changes, the issuance of corporate bonds fell sharply.
(2) Differentiated according to the method of issuance
In the first quarter, the proportion of bonds issued by way of public offering increased, with public bond issuance increasing by RMB355.5 billion or 14.84% year-on-year from RMB2,394.9 billion last year, and private bond issuance of RMB773.4 billion, a decrease of RMB24.4 billion from RMB797.8 billion last year. Or because the cost of public offering is lower, the issuer prefers to be issued by public offering.
(3) Distinguish according to the maturity of bonds
The issuance of long-term credit bonds increased significantly in the first quarter. Short-term financing of 1 Y and within has decreased significantly, and the financing volume of other maturities has increased, 3-5Y term financing has increased most significantly, 5-10Y financing has increased significantly, with 154.8 billion yuan issued in the first quarter of this year three times that of the same period last year, and the issuance scale of more than 10Y has increased significantly in the first quarter of this year, totaling 37.7 billion yuan, exceeding the total issuance of the first quarter of 2021-2023 by five times.
(4) Distinguish according to bond ratings
In terms of credit bond issuance in the first quarter, the issuance of high-rated entities increased, while the issuance of low-rated entities decreased. Specifically, AAA-rated credit bonds increased by 19.42% compared with last year, the issuance of AA+ bonds was flat compared with last year, and the financing of credit bonds below AA decreased by 14% compared with last year.
2. The issuance of urban investment bonds in the first quarter
(1) Issuance and maturity of urban investment bonds
In the first quarter, the new issuance of urban investment bonds was flat compared with last year, and the maturity increased by 446.8 billion yuan compared with last year, an increase of 40% year-on-year, combined with the net financing of urban investment bonds decreased significantly, a decrease of 456.9 billion yuan from the first quarter of last year.
(2) Urban investment bonds are differentiated according to the method of issuance
In the first quarter, the changes in the issuance method of urban investment bonds were consistent with the direction of overall credit bonds, with an increase in public offerings and a decrease in private offerings. In the first quarter of this year, the public offering of urban investment bonds increased by 55.6 billion yuan over the same period last year, and the private offering decreased by 65.7 billion yuan over the same period last year, and the proportion of public offering increased from 55.93% to 59.56%.
(3) Deadline classification of castle throws and tickets
Since the second half of 2023, due to the stricter review of urban investment bond issuance, the uncertainty of new bond issuance has increased, and the issuer's intention to extend the duration is obvious. In the first quarter of 2024, the issuance of urban investment bonds decreased by RMB270.9 billion in 1Y, the issuance of 3-5Y increased by RMB258.3 billion, an increase of 483.63% over the same period last year, and the issuance of 5Y and above increased by RMB23.2 billion over the same period last year.
(4) Urban investment bonds are differentiated according to bond ratings
In the first quarter, the issuance of urban investment bonds increased by high-rated entities, while the issuance of medium- and low-rated bonds decreased. Specifically, AAA-rated credit bonds increased by 73.8 billion yuan compared with last year, AA+ rated credit bonds decreased by 36.9 billion yuan compared with last year, and AA and below credit bonds decreased by 47 billion yuan compared with last year, which is consistent with the policy direction of reducing the issuance of weakly qualified urban investment bonds and reducing debt risks.
3. Follow-up outlook
Based on the issuance in the first quarter of 2024, it is expected that the subsequent new bond issuance will remain at the current level:
Urban investment mainly borrows new to repay the old, and it is difficult to issue new ones, and the issuance scale is stable but difficult to increase;
Enterprises are more willing to issue long-term bonds, and the duration of the credit market is elongating.
The issuance of high-rated public credit bonds increased, while the issuance of low-rated private credit bonds decreased.
At the same time, the follow-up recommendations should pay attention to the tail risk of urban investment, and with the advancement of the process of "debt", there may be a large change in the pattern.
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