After Moody's downgraded the outlook of China's sovereign credit rating from stable to negative, it also downgraded the rating outlook of a number of Chinese financial institutions and state-owned enterprises, including 53 urban investment companiesWhat are the elements needed for the successful transformation of urban investment?How to choose the path of regional debt resolution under different resource endowment conditions?Let's take a look at what the market is saying.
Moody's downgrade has had limited impact
On December 5, 2023, Moody's downgraded the outlook of China's sovereign credit rating from stable to negative, and then downgraded the rating outlook of a number of Chinese financial institutions and state-owned enterprises, including 53 urban investment companies. These urban investment companies are generally located in Shandong, Zhejiang and other financially developed regions, and have a higher administrative level and a large scale of assets, and most of them belong to entities with a high degree of importance and good qualifications. As for Moody's statement that "the current measures cannot solve the sustainable problem of local ** debt", it still needs time to verify, and the efforts of China** cannot be denied. In addition, after the "debt package" was proposed, the financing cost of urban investment bonds in weak areas has dropped significantly since July, and the non-standard default of urban investment has also decreased. Judging from the current market situation, after Moody's downgraded the rating outlook of 53 urban investment companies, the domestic bond market did not overreact to this, and the bond valuations of the urban investment involved were relatively consistent with the yield trend of the overall urban investment bond market, and there was no significant valuation adjustmentIn the future, the impact is relatively limited, because most of these urban investment entities have better qualifications, and the short-term default risk of urban investment bonds in the context of debt reduction is the consensus of the current market, so investors do not need to worry too much. 
*: Yu Yan Bond Market.
To read the full article, please click hereMoody's downgraded the rating outlook of 50+ urban investment companies, with limited impact.
What are the elements needed for the successful transformation of urban investment?
Recently, the topic of "market-oriented business entity" has attracted market attention, and the transformation of urban investment platform to market-oriented business entity has become an inevitable trend. Hefei Construction Investment".The following elements are necessary for the successful transformation: first, the introduction of industrial support policies, and the strategic emerging industries as the main starting point for transformation and upgrading;Second, the introduction of listed company resources, the industrial and information technology industry accounted for nearly sixty percent of the listed companies;Third, the top-level design builds the industrial ecology, and the virtuous cycle of "fundraising, investment, management and withdrawal" plays a multiplier effect. 
*: Fixed Dutch language.
To read the full article, please click hereUnder the transformation of urban investment, how to choose the time and choose the bond?——Take Hefei Construction Investment as a reference.
How to choose the path of regional debt resolution under different resource endowment conditions?
Behind the main debt measures are the financial resources, financial resources and state-owned enterprise resources that can be mobilized in the region, and the adequacy of these resources is affected by different factors, so the corresponding indicators are selected for analysis to depict the adequacy of different regional debt resource endowments. Based on the great differences in debt resources in different regions of China, each region should formulate systematic debt reduction measures and debt emergency management plans according to its own debt burden and resource endowment. In addition to actively resolving local debt risks from the perspective of commonality, based on the differences in debt resource endowments, different regions should also focus on resolving measures: (1) The eastern region is rich in financial resources, financial resources and state-owned enterprise resources as a whole, and all regions should focus on debt management and risk early warning, mainly through the market-oriented transformation and upgrading of urban investment enterprises to strengthen the hematopoietic function and promote the virtuous cycle of debt, and at the same time prevent the accumulation of debt risks due to radical business expansion in the process of transformation. (2) On the one hand, each region should comprehensively coordinate various resources to alleviate debt risks based on its own advantages, and on the other hand, it should strengthen the preliminary research and review of projects to prevent the inefficient growth of regional debt. (3) Except for individual provinces and municipalities, the financial resources, financial resources and state-owned enterprise resources in the western region are worse than those in the eastern and central regions, but there are great advantages in the support of the superiors.