The issuance of ultra-long-term special treasury bonds has landed: the first offering of 40 billion yuan this Friday, can individuals buy it

Shell Finance

2024-05-13 18:55Posted on the official account of Beijing Beijing News Shell Finance

The long-awaited ultra-long-term special government bonds have finally ushered in the issuance plan.

On May 13, the Ministry of Finance announced the relevant arrangements for the issuance of general treasury bonds and ultra-long-term special treasury bonds in 2024. According to the arrangement, there are three types of ultra-long-term special treasury bonds with maturities of 20 years, 30 years and 50 years, and the number of issuances is 7, 12 and 3 respectively, all of which pay interest on a semi-annual basis, and the issuance time is concentrated from mid-May to mid-November. According to the announcement of the Ministry of Finance, the Ministry of Finance will bid for the first 30-year special treasury bond of 40 billion yuan on Friday (17th), which is the first issue of this year.

Industry insiders believe that the issuance of ultra-long-term special treasury bonds can better match the financing needs of long-term projects, improve the efficiency of capital use, and enhance the financial guarantee capacity for long-term projects.

Source: Official website of the Ministry of Finance

1 trillion yuan "small and frequent" mainly for 30 years

The government work report proposes that starting from this year, it is planned to issue ultra-long-term special treasury bonds for several consecutive years, which will be used for the implementation of major national strategies and security capacity building in key areas, and 1 trillion yuan will be issued in 2024.

At the end of April, the Politburo meeting made it clear that "it is necessary to issue and make good use of ultra-long-term special treasury bonds as soon as possible", and now, the "boots" have finally landed.

Feng Lin, director of the research and development department of Oriental Jincheng, believes that from the perspective of the issuance arrangement, there are several information worthy of attention. First of all, the issuance arrangement clarifies the bidding date for ultra-long-term special treasury bonds, which will be issued from the initial offering on May 17 to the completion of the issuance in mid-November, a total of 22 issuances. Judging from the issuance arrangement, the issuance cycle of 1 trillion yuan of special treasury bonds this year is longer than the market expects, and the pace of issuance is relatively slow, which is conducive to avoiding the periodic pressure on the capital side caused by the centralized issuance.

Second, judging from the bidding arrangement, the issuance of special treasury bonds should be market-oriented, rather than directional. "The adoption of market-oriented issuance can not only reflect the determination to promote market-oriented pricing of bond issuance, but also help mobilize all kinds of social funds to participate in the construction of major projects in key areas." Feng Lin said that in addition, the ultra-long-term special treasury bonds are mainly 30 years, some of which are as long as 50 years, and the extended maturity can better match the financing needs of long-term projects, improve the efficiency of capital use, and enhance the financial guarantee ability of long-term projects.

Ultra-long-term special treasury bonds can boost consumption and support the development of key areas

In addition to the "ultra-long" maturity, the special feature of the ultra-long-term special treasury bonds issued in this round is that the funds have a specific and clear purpose.

According to the National Development and Reform Commission, the ultra-long-term special treasury bonds will focus on key tasks such as accelerating the realization of high-level scientific and technological self-reliance and self-reliance, promoting the integrated development of urban and rural areas, promoting coordinated regional development, improving the security of food and energy resources, promoting high-quality population development, and comprehensively promoting the construction of a beautiful China.

In short, the money is mainly used for economic construction and to promote the sustained recovery and transformation of the mainland's economy.

It is worth mentioning that ultra-long-term special treasury bonds will be issued not only this year, but also in the next few years. Lian Ping, president and chief economist of Guangkai Chief Industry Research Institute, said that from the perspective of policy effects, ultra-long-term special treasury bonds take into account both short-term and long-term interests, which can not only stimulate current investment and consumption, but also build a solid foundation for long-term high-quality development, and at the same time benefit local finances to recuperate.

Lian Ping further said that first of all, the contribution rate of the mainland's final consumption expenditure to GDP in 2023 will be as high as 82.5%, becoming the first driving force for economic growth, and the contribution rate of fixed asset investment to GDP will be 28.9%, which is still an important starting point for stable growth. Second, on the whole, the main areas and directions of ultra-long-term special treasury bond support may be highly consistent with major strategies for social and economic development, and these areas are of great significance to the future substantial leap in the mainland's economic strength, scientific and technological strength, and comprehensive national strength.

Three rounds of special treasury bonds have been issued before, and experts suggest that this time it can be issued by individuals

In fact, this is not the first time that the mainland has issued special treasury bonds, and has already issued three rounds of special treasury bonds, the first of which was in 1998, when it issued 270 billion yuan of special treasury bonds, with the aim of injecting capital into the four major banks to meet the requirements of capital adequacy ratios and cope with the high non-performing loan ratio.

In the second round in 2007, the Ministry of Finance issued 1.55 trillion yuan of treasury bonds to the Agricultural Bank of China and the public to purchase about US$200 billion of foreign exchange, while the Ministry of Finance issued 200 billion yuan of treasury bonds to the public to recover liquidity from the market, and the funds raised were also used to purchase foreign currency as capital for the establishment of CIC. Therefore, the special treasury bonds are mainly used to recover liquidity, curb inflation, and inject capital into the establishment of CIC.

The third round was in 2020, when the mainland issued 1 trillion yuan of special anti-epidemic treasury bonds, which were used for infrastructure construction such as public health and anti-epidemic related spending through a special transfer payment mechanism.

Can the people buy the ultra-long-term special treasury bonds issued this time?

For example, the special treasury bonds in 1998 were issued in a directional manner, and the people could not invest directly, but the special treasury bonds in 2020 were issued to the public and could also be purchased by individual investors.

Lian Ping believes that ultra-long-term special treasury bonds can be considered for issuing to institutions and individuals at the same time. On the one hand, in recent years, mainland residents have a strong demand for investment, and ultra-long-term special treasury bonds are guaranteed by national credit, which has the advantages of low risk, strong liquidity, exemption from interest income tax, etc., and the income is higher than that of short- and medium-term treasury bonds, making them more ideal investment products. On the other hand, banking institutions are currently facing challenges such as narrowing net interest margins, declining profit growth, and insufficient endogenous capital replenishment.

Guohai Securities Research Report also said that this round of ultra-long-term special treasury bonds is more likely to be issued in the market. There are three reasons: first, from the perspective of historical cases, in recent years, the government has become more and more inclined to adopt the method of full market-oriented issuance; Second, if too many ultra-long-term special treasury bonds are issued to banking institutions, it may cause the risk of "maturity mismatch". Third, the market-oriented issuance of special treasury bonds can alleviate the current situation of "lack of assets" in the bond market.

Beijing News Shell Financial Reporter Pan Yichun Editor Chen Li Proofreader Liu Baoqing

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