Since Circular 15, there are many local platforms that are not allowed to add new liquidity loans. Like the platforms in some weak economic regions, their financing channels are greatly affected, so their capital turnover and repayment pressure will be greater.
Therefore, many platforms in weak economic areas have to issue fixed financing products, but the characteristics of fixed financing products are that the cost of financing is very high, the term is relatively short, and then their interest payments are very frequent. Isn't this approach a bit similar to the nature of bridge funds?
In fact, fixed financing products are more like enhanced bridge funds. However, such products will exacerbate the pressure on the liquidity of urban investment companies, and the emergence of public opinion on fixed financing products will have a certain impact on the refinancing ability of the region. Like Shandong, Sichuan, Henan, Guizhou and other places, their public opinion is relatively concentrated, because the scale of their issuance is relatively large, so their later rolling pressure is also very large.
At present, the urban investment platform is mainly based on bank or bond financing, supplemented by non-standard. However, the current market environment is that the regulators have made certain restrictions on non-standard channels, such as trusts and financial leasing. However, fixed financing products are basically not subject to any supervision, and this kind of so-called fake gold exchange does not have any audit system, basically giving money to information, just let you issue products, and will not care about any qualifications at all.
Therefore, more than 70% of the products of the development and financing category are AA rated or unrated enterprises, and many of them are still ordinary state-owned enterprises. In fact, this also leads to the fact that the later risk of this kind of product will be very large. And as we mentioned earlier, this kind of product is more of the nature of bridge funds, which can relieve the pressure on local platforms in the short term.
Moreover, because this kind of product is not a formal financial product, whether the rights and interests of investors can be protected is a big risk point. In addition, in the policy document on debt settlement, it is clearly stated that in the case of consensus, the kind of high-interest non-standard debts shall not be simply redeemed, and some high-interest debts can be redeemed at a discount.
Therefore, we will find that some trust products in weak economic areas also have cases of discounted payment. Trust is a formal financial product, and their high-interest products have been discounted, so what kind of situation will you face when you say that for the informal and high-interest financial products of fixed financing? I hope you will be clear about this.
When you buy this kind of high-yield product, high-yield is a premium for you to bear high risk, if the product is redeemed normally, then you may have earned, but if the product is overdue, or even discounted principal payment, you should be clear about this risk.
Therefore, we have always recommended that you be cautious about fixed financing products. If you have anything unclear, you can leave a message, and we will reply to you as soon as possible.