Is the 30-year special Treasury bond worth buying? The interest rate is 2.57%, which is paid semi-annually

Financial Mayflower

2024-05-17 21:49Published on the official account of the financial group of Shanghai Caijing magazine

Summary

In history, there have been five special treasury bonds, and the duration of the issuance of special treasury bonds has been as short as 3 years, mostly 5~10 years, and the longest is 30 years. The ultra-long-term special treasury bonds issued this time are 30-year bonds

Text: Yan Qinwen

Editor|Hu Rongping, Yuan Man

The long-awaited ultra-long-term special treasury bonds were officially issued.

On the morning of May 17, after a competitive bidding by an underwriting group of 56 financial institutions, the coupon rate of the first ultra-long-term special treasury bond was released. According to the official website of the Ministry of Finance, the actual face value of the current treasury bonds is 40 billion yuan, the term is 30 years, and the coupon rate determined by the bidding is 2.57%, and the interest will be calculated on May 20, 2024, and the distribution will be carried out from May 20 after the end of the bidding, and the listing and trading will be carried out on May 22.

According to Wind data, the "24 Special Treasury Bond 01" has a market multiple of 3.9 and a marginal multiple of 382.6. "The multiples of the whole market are medium to high, and the previous treasury bond bidding multiples were mostly around 2-3 times." A market participant pointed out that from the perspective of interest rates and subscription multiples, the first special treasury bond is favored by institutional funds.

In the view of Dong Ximiao, chief researcher of Zhaolian, in the context of "asset shortage", ultra-long-term special treasury bonds have largely played a role in providing relatively safe assets for the market, which just meets the needs of financial institutions including banks and wealth management companies, and is welcomed by institutions in line with expectations.

In addition to institutional investors, individual investors can also participate. According to the Q&A on the Purchase of Treasury Bonds by Individual Investors (hereinafter referred to as the "Q&A") issued by the Ministry of Finance on May 17, the ultra-long-term special treasury bonds issued this year are book-entry treasury bonds, with three maturities of 20-year, 30-year and 50-year maturity, and the specific purchase operation shall be handled in accordance with the book-entry treasury bond purchase process.

"Book-entry treasury bonds are mainly issued to institutional investors in the primary market through book-entry treasury bond underwriting syndicates, and the claims are recorded in the Central Clearing Company in the form of electronic bookkeeping. After listing, individual investors can also buy from institutional investors in the secondary market. The above-mentioned Q&A mentions.

"Caijing" learned from the account manager of a joint-stock bank that the bank's ultra-long-term special treasury bonds will be sold at 10 a.m. on May 20, and can be purchased through business outlets or mobile banking, "with an interest rate of 2.57%, and customers with a risk rating of A3 (balanced, risk tolerance rating of five) and above can only buy."

1. Individual investors with a risk level of A3 or above can buy

In the context of the continuous decline in the yield of various asset management products and deposit interest rates, the situation of "difficult to find a bond" continues to be staged, and the news of "second light" and "difficult to grab" of savings treasury bonds has attracted market attention.

It should be pointed out that "this treasury bond is not the other treasury bond", although both of them obtain stable principal and interest income at the maturity of holding, but unlike savings treasury bonds, the ultra-long-term special treasury bonds issued this time are book-entry treasury bonds.

As for the difference between the two, the Ministry of Finance elaborated in the "Questions and Answers": Savings treasury bonds cannot be listed and traded during the duration period, while book-entry treasury bonds can be traded in the market during the duration period. The trading price of book-entry treasury bonds fluctuates with market conditions, and investors may gain trading income due to rising prices after buying, or they may face the risk of losses due to falling prices. Therefore, individual investors in book-entry treasury bonds should have certain investment experience and risk-taking ability for the purpose of trading profits rather than holding them to maturity.

An account manager of a joint-stock bank told Caijing that according to the regulations issued by the bank on May 17, only customers with a risk level of A3 or higher can buy ultra-long-term special treasury bonds.

According to a bank text message posted by a bank customer, the 2024 ultra-long-term special treasury bonds (phase I) book-entry treasury bonds will have a maturity of 30 years and a coupon rate of 2.57%, and interest will be paid semi-annually, and the coupon value will be paid at maturity. Since the holding period is ultra-long-term, the price volatility of bonds sold during the holding period will be higher than that of short- and medium-term treasury bonds.

"Generally, ultra-long-term treasury bonds are bought more by institutions and less by individuals," said the account manager, on the one hand, the maturity of 20 years, 30 years, and 50 years is too long for individuals; On the other hand, institutional purchases can be flexibly traded in the secondary market to make profits, while it is relatively difficult for individuals to buy and change hands.

According to the bank's mobile app, the current interest rate of the bank's savings bonds is 2.5% for 5 years and 2.38% for 3 years. The interest rate for a 3-year fixed deposit is 1.95%.

According to the issuance arrangement, this year's ultra-long-term special treasury bonds will be issued for 20 years, 30 years, and 50 years, and the number of issuances will be seven, 12, and three respectively, and interest will be paid on a semi-annual basis.

Among them, 7 20-year ultra-long-term special treasury bonds were issued, 2 were issued for the first time and 5 were renewed, and the earliest was issued on May 24; 12 30-year ultra-long-term special treasury bonds were issued, 3 were issued for the first time and 9 were renewed, and the earliest was issued on May 17; 3 50-year ultra-long-term special treasury bonds are to be issued, 1 for the first time and 2 for the renewal, which will be issued as early as June 14.

2. Included in the delivery scope of treasury bond futures

Looking back on the past, there have been five special treasury bonds issued in history, and from the perspective of the issuance period of previous special treasury bonds, the short is 3 years, most of them are concentrated in 5~10 years, and the longest is 30 years. Compared with the previous years, the maturity of special government bonds has been significantly longer.

With the launch of the issuance of ultra-long-term special treasury bonds, some researchers believe that it may bring a certain impact to the market. On the morning of the issuance of the first ultra-long-term special treasury bond, the bond market fluctuated wildly.

A number of industry analysts pointed out that with the landing of ultra-long-term special treasury bonds, monetary policy will strengthen coordination with fiscal policy. Zhang Xu, chief fixed income analyst of Everbright Securities, said that during the issuance process, monetary and fiscal policies were fully coordinated, and the People's Bank of China created a suitable liquidity environment through OMO (open market operation) and MLF (medium-term lending facility) and other tools.

"If factors such as future government bond issuance disrupt the liquidity of the banking system, then the monetary authority may use reserves and other tools to maintain a reasonable and sufficient liquidity in the banking system." Zhang Xu pointed out.

"According to past historical experience, market shocks and impacts are mainly before the issuance is landed, and after the issuance is landed, the focus is on whether the policy forms a joint force to promote the overall macro fundamentals or macro expectations to further improve." The fixed income research team of Tianfeng Securities said that it is expected that according to the current macro policy orientation of seeking progress while maintaining stability, the problem of insufficient effective demand may continue for a period of time, and the impact of subsequent supply on the bond market is expected to be within the scope of local friction. Maintain the judgment that the 30-year Treasury bond is in the range of 2.4%-2.6%.

In Dong Ximiao's view, the issuance of ultra-long-term special treasury bonds is of great significance in three aspects: first, it is specially used for the implementation of major national strategies and security capacity building in key areas, solves the problem of shortage of funds for the construction of major projects, stimulates investment, expands consumption, and helps build a modern industrial system; Second, optimizing the debt structure of the central and local governments, issuing them in the name of the central government, and supporting local economic construction, will help reduce the leverage ratio of local governments and prevent local debt risks. Third, it will send a clear signal that fiscal policy will be more active in supporting economic development, which will help boost market confidence, stabilize expectations, and accelerate macroeconomic recovery.

"In order to meet the demand for medium- and long-term liquidity for government bonds and ultra-long-term special treasury bond issuance, it is expected that the central bank will likely reduce the reserve requirement ratio in the second quarter to provide long-term stable and low-cost funds for financial institutions and create a more suitable liquidity environment." Dong Ximiao pointed out.

It is worth mentioning that on the day of the issuance of the first ultra-long-term special treasury bonds, the China Financial Futures Exchange clarified that the 30-year special treasury bonds issued in this round meet the conditions for deliverable bonds of treasury bond futures and will be included in the scope of deliverable bonds of 30-year treasury bond futures for the physical delivery of treasury bond futures.

The analysis points out that this is conducive to the use of 30-year treasury bond futures by the members of the treasury bond underwriting syndicate to manage the risk of interest rate fluctuations of ultra-long-term special treasury bonds, enhance the enthusiasm of the underwriting syndicate members to subscribe for ultra-long-term special treasury bonds, and promote the smooth issuance of ultra-long-term special treasury bonds.

(The author is a reporter from Caijing)

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