Xinhua News Agency, Beijing, May 17 (Xinhua) -- How to issue ultra-long-term special treasury bonds? What are the implications?
Xinhua News Agency reporter Shen Cheng
The issuance of ultra-long-term special government bonds, which has attracted much attention, has been put on the agenda. On the 17th, the 2024 ultra-long-term special treasury bonds (phase I) launched a bidding with a term of 30 years and a total bidding amount of 40 billion yuan.
How to arrange the issuance of 1 trillion yuan of ultra-long-term special treasury bonds this year? What are the implications? The reporter interviewed experts and industry insiders.
How will it be released this year? What is the purpose of the arrangement?
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 this year.
How to issue ultra-long-term special treasury bonds? Why?
According to the notice issued by the Ministry of Finance, the maturity of ultra-long-term special treasury bonds to be issued this year is 20 years, 30 years and 50 years, and the number of issuance periods is 7, 12 and 3 respectively, a total of 22 periods, and the interest payment method is to pay interest on a semi-annual basis.
"The term of the treasury bonds is scientifically designed, taking into account the implementation cycle of the construction project corresponding to the ultra-long-term special treasury bonds, effectively guaranteeing the long-term capital needs of the 'double' project, and also combining the bond market demand." Ao Yifan, director of the Central Depository and Clearing Co., Ltd., said.
"Among them, the 20-year treasury bond is issued for the first time this year, which is conducive to building a more complete treasury yield curve, giving full play to the function of pricing benchmarks, improving the interest rate transmission mechanism, and improving the quality and efficiency of the bond market to serve the real economy." Wang Hailu, general manager of the financial market department of the head office of the Industrial and Commercial Bank of China, said.
The issuance will be issued from mid-May to mid-November. Among them, the 30-year ultra-long-term special treasury bonds were first issued on May 17, the 20-year ultra-long-term special treasury bonds were first issued on May 24, and the 50-year ultra-long-term special treasury bonds were first issued on June 14.
"It can be seen that the issuance of ultra-long-term special treasury bonds this year is stable and orderly." Wang Hailu said that the pace of issuance, which lasted for about six months, was relatively slow, and the supply interval was long, which helped to maintain the smooth operation of the bond market.
What about the first issue? What is the impact on the market?
The reporter learned that in order to ensure the smooth issuance of the first bond, all parties actively made a number of preparations.
As the first place for the issuance of ultra-long-term special treasury bonds, China Central Depository and Clearing Co., Ltd. has made great efforts to support the issuance of treasury bonds, including closely monitoring the government bond issuance system of the Ministry of Finance operated and maintained by the company, conducting a comprehensive review of the operating systems involved, and conducting simulation verification of the whole process of issuance business.
"As a major state-owned bank and a member of the Class A underwriting syndicate of treasury bonds, ICBC will give full play to its advantages in capital, channels, personnel and expertise, and actively do a good job in the underwriting and investment of ultra-long-term special treasury bonds." Wang Hailu said.
In terms of interest rates, the interest rate of ultra-long-term special treasury bonds is determined through the bidding of the members of the treasury bond underwriting syndicate, and the market is carried out with it. According to the latest bidding results released on the 17th, the coupon rate of the 2024 ultra-long-term special treasury bonds (phase I) is 2.57%.
"The market is enthusiastic about subscriptions." Luo Zhiheng, chief economist of Yuekai Securities, said that investors have a relatively positive willingness to subscribe for ultra-long-term special treasury bonds.
At present, the market has a strong demand for long-term treasury bond allocation. In Wang Hailu's view, as a long-term asset, ultra-long-term special treasury bonds are in line with the current market demand. After the issuance is launched this week, it will be of great significance to improve the supply of bonds and promote the balance between supply and demand in the bond market.
How is it issued? Can I purchase it for individuals?
This reporter has learned that this year's ultra-long-term special treasury bonds are all book-entry treasury bonds, which will be issued by public bidding to members of the book-entry treasury bond underwriting syndicate in a market-oriented manner.
It should be reminded that the people buy more savings treasury bonds on a daily basis, which have relatively stable income characteristics and are more suitable for individual investors seeking stable and long-term returns. Ultra-long-term special treasury bonds, on the other hand, are book-entry treasury bonds, which can be listed and traded, have high liquidity, and the trading price will fluctuate according to market conditions.
At present, whether individuals can buy ultra-long-term treasury bonds has also attracted some public attention.
According to industry insiders, in terms of mechanism, ultra-long-term special treasury bonds are the same as general book-entry treasury bonds, and individual investors cannot directly participate in the bidding and purchase through the issuance system, but theoretically can open accounts in the exchange market or the counter market of commercial banks to purchase and trade ultra-long-term special treasury bonds.
However, taking into account factors such as the long maturity of ultra-long-term special treasury bonds and the fluctuation of yields, it is expected that commercial banks will make overall arrangements for the sale of appropriate types of bonds to individuals over the counter in light of market risk characteristics and the risk appetite of traditional subscribers of treasury bonds. This reporter asked some bank outlets about the subscription of ultra-long-term special treasury bonds, and the reply they received was that the specific subscription time still needs to be confirmed.
Some experts suggest that if the subsequent commercial bank chooses the appropriate type of securities to sell to individuals, individual investors also need to consider whether to subscribe according to their own circumstances, and it is recommended that investors should have certain investment experience and market analysis ability.
How to manage and use funds well? What are the positive effects?
After the treasury bond funds are raised, how to manage and use them well in the future is particularly crucial.
It is understood that in the next step, the Ministry of Finance will strengthen the overall planning of central and local funds, stock and incremental funds while doing a good job in issuance, form a joint force with ultra-long-term special treasury bond funds, and improve the overall efficiency of funds. Combined with the actual situation of ultra-long-term special treasury bond funds, we will study the establishment of a regulatory mechanism, strengthen the supervision of the whole process of fund allocation, issuance, and use, and ensure standardized, safe, and efficient use.
Regarding the direction of the use of funds, Liu Sushe, deputy director of the National Development and Reform Commission, previously introduced that the focus will be on accelerating the realization of high-level scientific and technological self-reliance and self-reliance, promoting the integrated development of urban and rural areas, promoting regional coordinated development, improving the security and security capacity of food and energy resources, promoting high-quality population development, and comprehensively promoting the construction of a beautiful China.
Experts and scholars generally believe that the mainland's issuance of ultra-long-term special treasury bonds this year will not only benefit the present but also benefit the long-term, which can not only stimulate current investment and consumption, but also lay the foundation for long-term high-quality development.
"Ultra-long-term special treasury bonds are issued by the central government, and part of the funds are used by local governments. After the use of funds is effective, it will not only have a positive impact on economic and social development, but also help to optimize the structure of government debt and optimize local fiscal space. Luo Zhiheng said.