Financial reporter Liu Xiao
There has been the latest progress in the much-talked-about arrangement for the issuance of ultra-long-term special government bonds.
On May 13, the website of the Ministry of Finance disclosed the Notice on Announcing the Relevant Arrangements for the Issuance of General Treasury Bonds and Ultra-long-term Special Treasury Bonds in 2024, clarifying the arrangements for the issuance of ultra-long-term special treasury bonds in 2024.
From the point of view of arrangement, the issuance period is 20 years, 30 years and 50 years, the number of issuances are 7, 12 and 3 times, respectively, the specific amount of each issuance has not been disclosed, the interest payment method is semi-annual interest, the issuance time is distributed from mid-May to mid-November.
Better match long-term project financing needs
In the bond market, interest rate bonds with a maturity of more than 10 years are generally considered to be "ultra-long-term bonds". Compared with ordinary government bonds, ultra-long-term bonds can alleviate the pressure of debt repayment in the short and medium term, exchanging time for space.
According to the statistics of the Guangkai Chief Institute of Industry and Research, the mainland has issued a total of five special treasury bonds, including three new issuances (1998, 2007, 2020) and two sequels (2017 and 2022). Judging from the issuance period of previous special treasury bonds, the short ones are only 3 years, the 5-10 years are relatively concentrated, and the longest is 30 years.
This year's government work report pointed out that in order to systematically solve the problem of funding for the construction of some major projects in the process of building a strong country and national rejuvenation, it is planned to issue ultra-long-term special treasury bonds for several consecutive years starting this year, which will be specially used for the implementation of major national strategies and security capacity building in key areas, and 1 trillion yuan will be issued this year.
According to the implementation of the central and local budgets in 2023 and the draft central and local budgets in 2024, the 1 trillion yuan of ultra-long-term special treasury bonds issued this year will not be included in the deficit.
On April 22, Wang Jianfan, director of the Budget Department of the Ministry of Finance, said at a press conference of the State Council Information Office that the issuance of ultra-long-term special treasury bonds is a major strategic deployment made by the CPC Central Committee and the State Council with a view to the overall strategic situation, and is of great significance to promoting the construction of a strong country and the great cause of national rejuvenation. The Ministry of Finance will start the issuance of ultra-long-term special treasury bonds in a timely manner according to the allocation of ultra-long-term special treasury bonds. Combined with the demand of the bond market and the implementation cycle of the construction project corresponding to the ultra-long-term special treasury bonds, the term of the issuance varieties will be scientifically designed to achieve a reasonable match with the project term. At the same time, we will coordinate the issuance of general treasury bonds and special treasury bonds, rationally arrange the pace of issuance, and effectively ensure the capital needs of special treasury bond projects.
Luo Zhiheng, chief economist of Guangdong Kai Securities, said in an interview with Fengkou Finance that the issuance of special treasury bonds is conducive to expanding aggregate demand and consolidating the upward trend of the economy. It is conducive to reducing economic and social operating costs, improving economic operation efficiency, and optimizing the supply structure. In addition, the debt structure of the central and local governments can be optimized to reduce debt risks.
Jones Lang LaSalle Greater China Chief Economist Pang Ming told Fengkou Finance that ultra-long-term treasury bonds can ensure sustained and stable fiscal spending. The ultra-long-term special treasury bonds to be issued by China will not be included in the deficit, and can be issued at an opportune time based on market and economic conditions under the trend of the central government's moderate increase in leverage, with a view to ironing out the imbalance in local economic growth, social development, and debt pressure.
Feng Lin, director of the research and development department of Oriental Jincheng, believes 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 ability of long-term projects.
Experts: Consider offering to both institutions and individuals
"Although the amount of each issuance has not yet been disclosed, there is a high probability that it will be characterized by small and frequent issuance." Feng Lin told Fengkou Finance that from the perspective of issuance arrangements, the issuance cycle of 1 trillion special treasury bonds this year is longer than market expectations, and the issuance rhythm is relatively flat, which is conducive to avoiding staged pressure on the capital side due to centralized issuance.
The issuance period of ultra-long-term special treasury bonds includes 20 years, 30 years and 50 years, and in terms of the number of issuances, 30 years are the mainstay, Feng Lin believes that this is in line with market expectations. She said that from the past ultra-long-term ordinary treasury bond term, there are 20 years, 30 years, 50 years, etc., in recent years, the main issuance period is 30 years and 50 years, of which 30 years are the mainstay, from 2016, in order to improve the yield curve of treasury bonds, the Ministry of Finance began to increase the number of issuance of 30-year treasury bonds.
"Compared with the previous special treasury bonds, this round of ultra-long-term special treasury bonds has three outstanding characteristics: first, the issuance period is particularly long; second, it is continuously issued and the scale is particularly large; Third, the relevance of the issuance purpose to the economy and high-quality development is particularly high. Lian Ping, president and chief economist of Guangkai Chief Industry Research Institute, pointed out in an interview with Fengkou Finance that ultra-long-term special treasury bonds cover key time nodes such as 2030, 2035 and 2049, which can not only provide abundant ultra-long-term funds for major projects and major projects with long construction cycles and slow return on investment, but also dilute the pressure on interest payment of treasury bonds.
Can individual investors subscribe for special treasury bonds?
"Whether individual investors can participate in the subscription depends on the specific issuance object." Lian Ping said that from past experience, the 1998 special treasury bonds were issued to institutions, while the 2020 anti-epidemic special treasury bonds clearly encouraged individuals and small, medium and micro enterprise investors to subscribe. In order to promote the smooth issuance of this round of ultra-long-term special treasury bonds, it is suggested that the issuance of ultra-long-term special treasury bonds to institutions and individuals should be considered at the same time. Of course, the target of the issuance of specific bond batches can be appropriately focused on and distinguished.
Feng Lin believes that judging from the bidding arrangement, the issuance of special treasury bonds should be market-oriented, rather than directional. On the one hand, the adoption of market-oriented issuance reflects the determination to promote market-oriented pricing of bond issuance, and on the other hand, it is also conducive to mobilizing all kinds of social funds to participate in the construction of major projects in key areas.