Since October, the scale of local issuance of special refinancing bonds has exceeded 13 trillion yuan, and the new debt limit can be issued in advance at the end of the year, and the maximum debt limit will not exceed about 27 trillion yuan. It is expected that the deficit rate will continue to exceed 3% in 2024, and the local ** special bonds will increase slightly to about 4 trillion yuan.
Urban investment bonds have decreased significantly
With the process of localized bonds, the issuance of urban investment bonds, which is extremely hot, has been declining. Wind data shows that since September, the number and scale of urban investment bond issuance have been declining month by month, and the net financing amount has entered negative growth since November, and the scale of negative growth has further expanded in December. On the other side of the coin, the prepayment of urban investment bonds has soared, with the total prepayment amount reaching nearly 100 billion yuan since October.
In November this year, the scale of urban investment bond issuance was only 282.4 billion yuan, only about half of the scale issued in August. The number and amount of urban investment bonds issued decreased significantly every month, and the issuance volume in September, October and November decreased month-on-month respectively. 57%。
Under the increasingly stringent approval policy, the number of urban investment bonds reviewed and reported as "terminated" by the exchange has reached a new high, and the data of Enterprise Early Warning shows that as of December 18, a total of 209 urban investment bond projects have been terminated by the exchange in 2023. The number of urban investment bonds terminated since October has increased significantly, and a total of 51 urban investment bonds to be issued were terminated in November, a record high, making it the largest number of terminated urban investment bonds in 2023. As of December 18, 24 have been terminated. At the beginning of 2023, as of December 18, among the entities that received the termination approval, most of them were district and county-level platforms, accounting for about 555%, and the prefecture-level platform accounts for about 2723%。The main rating is AA, accounting for about 5497%, followed by AA+. The stronger the attributes of urban investment or the greater the possibility of hidden debts being involved, the higher the proportion of termination.
At the same time, not only are there fewer new urban investment bonds, but urban investment companies are still struggling to repay existing debts. In the past two months, the repayment scale of urban investment bonds has been relatively large, including the early redemption and redemption scale, and the amount of early redemption and redemption of urban investment bonds in the first half of December has exceeded that of November. As a result, the net financing amount of urban investment bonds has been negative since November (that is, the repayment amount is more than the amount raised by the issuance of bonds), which is -7071.6 billion, and the negative growth scale in the first half of December further expanded to 17683.4 billion.
The special debt is expected to exceed 4 trillion yuan, with a summary of the declaration
With the implementation of the "package of bonds", since October this year, various localities have accelerated the issuance of special refinancing bonds, and the scale of bonds has exceeded 13 trillion yuan. The actual issuance scale of new special bonds this year has reached 3About 8 trillion yuan. At the same time, the government will issue an additional 1 trillion yuan of national bonds, all of which will be used by local governments for post-disaster recovery and reconstruction and to make up for the shortcomings of disaster prevention, mitigation and relief.
In 2024, the early issuance of new special bonds is also underway, and according to the 60% red line set by the new debt limit authorized by the National People's Congress, it is estimated that the new debt limit that can be issued in advance by the end of this year will not exceed about 27 trillion yuan. It is expected that the overall scale of new special bonds will increase to about 4 trillion yuan in 2024, a slight expansion from this year
Lan Fo'an, Minister of Finance, said that according to the deployment and relevant work arrangements, part of the new local debt quota in 2024 will be issued in advance to reasonably guarantee local financing needs. This is conducive to the local government to reserve projects in advance and prepare for bond issuance in advance, as soon as possible early next year to form the physical workloadto achieve a good start to economic operation.
Attachment: Summary of special bond declaration
Special bond issuance process
The special bond declaration process is divided into:Demand escalation, project review, bond issuanceThree steps.
(1) Demand reporting
The project department in charge and the project unit shall screen the projects that meet the requirements of the special bond according to the development plan of the public welfare undertakings of the industry and the preliminary preparation of the project, and pass the local ** debt management system of the financial department and the national major project database of the development and reform department respectively. After the project requirements are reported to the Ministry of Finance and the National Development and Reform Commission for review, the Ministry of Finance and the National Development and Reform Commission will feedback the review results to the local government.
Prerequisites for application: project approval and feasibility study.
(2) Project review
Review process: On the basis of the approval of the Ministry of Finance and the Development and Reform Commission, the newly reported projects need to prepare "one case and two books" to participate in the expert review of the province's special bonds, and the projects that have passed the review will be included in the management of the province's issuance of alternative databasesRenewal projects do not need to be reviewed again.
Prerequisites for Screening:Two documents for one project (i.e., implementation plan, financial appraisal and legal opinion)., land use, environmental impact assessment, construction documents and other necessary procedures.
(3) Bond issuance
Application process: The Department of Finance will issue the quota of Chengdu special bonds in two batches, including early approval and the second batch, and select the issuance window.
Prerequisites for issuance:The project is already in the stage of commencement of construction or construction bidding, and the physical workload can be formed as soon as possible after the bond funds are in place
Special bond issuance
The declared project must comply with the relevant regulations of the investment fieldAt present, there are a total of 11 major areas in which special bond funds are investedThey are: transportation infrastructure, energy, agriculture, forestry and water conservancy, ecological and environmental protection, social undertakings, urban and rural cold chain and other logistics infrastructure, municipal and industrial park infrastructure, new infrastructure, major national strategic projects, affordable housing projects, and special major projects.
Negative list of special bonds
It shall not be used for public welfare projects without profit. ·
Market-oriented industrial projects that shall not be used for enterprise investment. ·
No land reserve projects other than rental housing construction, general real estate projects, and industrial projects will not be arranged.
It shall not be used as funds for various types of equity such as investment and industrial investment, and shall not inject capital through intermediate links such as the establishment of shell companies and multi-level subsidiaries to avoid nesting and amplifying leverage.
It is strictly forbidden to use it for enterprise subsidies or incentives, and for enterprises to borrow from abroad.
It is strictly forbidden to use it for recurrent expenditures such as project operation subsidies.
It is strictly forbidden to use it for image expenditures such as "lighting" projects, landscape improvements, and theme parks.
It is strictly forbidden to use it for the purchase of wealth management products.
The new special bonds must be used for construction projects, not for debt repayment, and are strictly forbidden to be used for bond interest expenses.
Use of special bond funds
(1) Direct investment funds used as ** investment projects.
After the issuance of special bonds is successful, and the funds enter the bond issuance income, they will be invested in the project in the form of direct investment, and the income realized by the project will be included in the ** income or operating special income for the repayment of the principal and interest of the special bonds.
(2) Debt funds used for the project company and project implementation entity.
The special bond funds enter the project company or project implementation entity as debt funds, and repay the principal and interest of the special bonds with the ** income generated by the project (such as toll roads) or special income.
(3) To be used as project capital. (See below for details).
Coordinated use.
In practice, some localities allocate the funds raised by the issuance of special bonds to the project unit, and at the same time, the income and special income generated by the project are used for the repayment of special bonds at maturity.
Special bonds can be used in the field of capital
The total number of areas in which special bonds can be used as capitalFifteenIncluding: railways, toll roads, trunk lines and regional airports in the eastern region, inland avionics hubs and ports, urban parking lots, natural gas pipeline networks and gas storage facilities, urban and rural power grids, water conservancy, urban sewage and garbage treatment, water supply and drainage, heat supply (including long-distance heating pipelines), gas supply, new energy projects (large-scale wind power photovoltaic bases, pumped storage power stations, renewable energy heating in villages and towns, deep-sea wind power and its transmission projects, new energy vehicle charging piles), coal reserve facilities, and national industrial park infrastructure.
The proportion of the special bond funds used for the project capital shall not exceed 25% of the scale of the special bonds of each province.
The term and method of issuance of special bonds
According to the "Opinions on Further Improving the Issuance of Local ** Bonds" (Cai Ku [2020] No. 36) issued by the Ministry of Finance on November 4, 2020, the maturity of local bonds is 1 year, 2 years, 3 years, 5 years, 7 years, 10 years, 15 years, 20 years, and 30 years. Localities are allowed to adopt different methods of principal repayment, such as repayment of principal at maturity, early repayment of principal, and repayment of principal in annual installments, in light of the actual situation
The local finance department shall ensure that the maturity of the special bond matches the term of the project. After the maturity of the new special bonds, in principle, the local government shall arrange the repayment of the income and special income, and if the term of the special bond does not match the term of the project, it can be financed in the same project cycle in the form of continuous issuance. Special bonds can be issued for a single project or for multiple projects.
The issuance market of local ** bonds includes the interbank bond market and the exchange bond market. Its issuance methods include:Public Offering(public tendering and public underwriting) andDirected underwriting offerings。In the case of underwriting or bidding, the interest rate of the issuance shall be determined above the average yield of book-entry treasury bonds with the same outstanding period from 1 to 5 working days before the date of underwriting or bidding.
Special bonds shall be registered and deposited in the ** Treasury Bond Depository and Clearing Co., Ltd., and sub-registration and custody in the ** registration and clearing institution stipulated by the state. After the issuance of special bonds, those who meet the requirements shall be listed and traded in the national inter-bank bond market and the first-class exchange bond market in a timely manner in accordance with relevant regulations.
Special debt repayment method
(1) Repay with the corresponding **sex** or special income.
2) The repayment of principal, interest and expenses of special bonds shall be reasonably estimated according to factors such as the scale, interest rate, rate and corresponding special income of special bonds due in the current yearIncluded in the overall arrangement of the annual **sexual** expenditure budget
3) Units using bond funds shall establish a unit repayment account for principal and interest and improve the debt repayment guarantee mechanism. Every year, the interest on the special bonds of the current year and the actual issuance expenses incurred shall be paid in full in accordance with the relevant regulations.
Conditions for the adjustment of special bond funds
On November 10, 2021, the Ministry of Finance issued a notice on the "Operational Guidelines for the Adjustment of the Use of Local ** Special Bonds", pointing out that the adjustment of the use of special bonds belongs to the scope of fiscal budget management, mainly for projects where the new special bond funds have been arranged, and the special bond funds cannot be used in a timely and effective manner due to changes in the implementation conditions of bond projects, and need to be adjusted to the changes in the use of special bond funds generated by other projects.
The use of special bond funds adheres to the principle that no adjustment is the norm and adjustment is the exception. Once a special bond is issued, the bond funds shall be used in accordance with the project purpose agreed in the strict issuance information disclosure document. It is strictly forbidden to arbitrarily adjust the use of special bonds without authorization, and it is strictly forbidden to misappropriate first and then adjust.
According to the Guidelines, the specific circumstances under which special bond funds have been arranged for adjustment include:
1.Significant changes occur during the implementation of the project, and there is no need for special bond funds or the demand is less than expected;
2.After the completion of the project, there is a surplus of special bond funds;
3.Finance, auditing, etc., find that there are violations in the use of special bonds, and it is necessary to adjust them in accordance with the supervision and inspection opinions or audit opinions;
4.Others that need to be adjusted.
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