It is reported that the 2024 special bond early approval quota has been issued in January, although the issuance time is a little later than in previous years, but in order to achieve a "good start" in the first quarter of the economy, the special bond project reserve and stock sorting work in many regions has been in full swing, in order to quickly start the issuance before the Spring Festival.
Looking back on the issuance of special bonds in 2023, due to the continuous development of debt reduction work and the increasing pressure on local interest payments, the compliance review of special bonds last year has become the focus of the work throughout the year, and the overall pace of issuance has also slowed down.
So this year, under the requirements of the fiscal policy tone of "moderate strengthening, quality and efficiency", whether the issuance of special bonds will be accelerated, and what changes in the review standards have become the focus of everyone's attentionAs far as the author knows, the pre-approved quota of special bonds in the province in 2024 will only support projects under construction. Although the evaluation standards vary from province to province, the overall review direction tends to be the same. Based on what I have learned, the author has sorted out four new changes in the evaluation criteria for special bonds in 2024 for your reference.
Since regional comprehensive development projects are conducive to the comprehensive planning of resources and the improvement of comprehensive benefits, they have always been the key consideration of local planning projects. Especially in recent yearsBoth financial institutions and local policies have been increasing their support for regional comprehensive development projects, which has accelerated the promotion of projects. For example, recently, a number of regional comprehensive development projects, including the urban renewal project in Kuiwen District, Weifang City, have completed bidding. Taking the urban renewal project of Weifang City as an example, the total investment of the project has reached 9.8 billion yuan, and the construction content includes schools, hospitals, a variety of real estate (including commercial, office, residential) buildings, as well as municipal infrastructure and various intelligent projects within the scope of the project.
However, in the process of promoting practice, it is precisely because of the large number of fields, large investment and long cycle involved in regional comprehensive development projects that they also conflict with the principles of public welfare, relevance and certainty of income required by the evaluation of special bond projects.
For example, regional comprehensive development projects often involve sub-projects in multiple fields, and the construction content of each sub-project is many and complex, which is not only difficult to coordinate in the landing process, but also prone to weak correlation between projects, or even hard packaging.
What's more, due to the long implementation period, regional integrated development projects are often susceptible to various uncertainties. For example, at the end of 2022, there were nearly 100 area development projects that had completed the bidding and landing, with a total investment of more than 13 trillion yuan. However, due to the subsequent changes in real estate policies, local fiscal revenues have declined sharply, which has had a huge impact on the smooth progress of these projects in the later stage.
It is understood that at present, some provinces have made further refinement requirements for the declaration of special bonds for regional comprehensive development projectsFor example, for regional comprehensive development projects involving many fields, large investment amounts, complex construction contents, and complex functions, each sub-project will be required to be further refined until it meets the requirements of the 11 support areas before it can be declared.
Public education and health care have always been sensitive areas for infrastructure financing. Around 2019, some cities with a large net inflow of population, in order to alleviate the difficulties of local degrees and medical treatment as soon as possible under the situation of their own financial constraints, adopted the model of investing in the construction of schools and hospitals through urban investment companies, and then renting them to public schools and hospitals. This model of "renting instead of building" can not only alleviate the pressure of one-time financial payment, but also increase the cash flow of urban investment, which has been imitated by many regions.
However, there are obvious hidden dangers in renting instead of building, public schools and hospitals themselves belong to public welfare units under budget management, so the rent they promise to pay can only be paid by financial funds, not the income of the project itself. Therefore, this rent-to-construction model is more like a disguised financing of deferred payment, which is very easy to cause hidden debt risks.
Although it is said that urban investment is the main body to do the project establishment and declaration of schools and hospitals, emphasizing the investment decision-making behavior of enterprises to avoid the risk of hidden debts, but in this way, schools and hospitals have become operational rather than public welfare assets, which has deviated from the requirements of special bonds, and at the same time, in accordance with the provisions of the "Guiding Opinions on Promoting the Reform of Public Institutions by Classification", public education, science and technology, culture, health and other public welfare undertakings suitable for promotion by public institutions are not suitable for enterprises as the subject of declaration.
Then, in the process of applying for special bonds for school and hospital projects in 2024, if the subject of the declaration is an enterprise and the income is rent, the project will obviously be strictly controlled.
In the past few years, industrial park projects have become a favorite for planning projects in various places because of their stable income, large project portfolio space and high approval rate.
But similar to regional mixed-use development projects,In recent years, there have also been many sub-projects in industrial parks, such as some sub-projects involving office buildings and conference centers that involve buildings, halls, halls or commercial real estate, which have become the focus of review.
In the process of applying for special bonds, some industrial park projects will blindly exaggerate the project benefits in order to package into some public welfare projects such as municipal roads and bridges, such as some.
Industrial parks in fourth- and fifth-tier cities or counties will even compare the rental income of first-tier cities to calculate revenue.
Therefore, in 2024, some regions have raised the threshold for industrial parks to declare special bonds, and will focus on supporting projects included in national and provincial industrial parks.
In accordance with the requirements of the Notice on Doing a Good Job in the Issuance of Local Special Bonds and Supporting Financing of Projects (No. 33 of 2019), more and more "portfolio financing" projects of special bond projects supported by banking institutions in the form of project loans and other means have been increasing in recent yearsIn 2024, the following aspects will also be focused on when reviewing "portfolio financing" projects:
(1) The project needs to meet the requirements of the investment field and have good returns. In order to determine the income and stability of the project, in the review of some regions, the applicant will be required to submit a letter of intent signed with relevant financial institutions and other information to prove the stability of the project's income.
(2) Whether the project has been pledged:Due to the risk control requirements of financial institutions, many projects will require measures to use the construction content such as factories under construction as collateral when applying for bank loans. Since the special bond supports the first investment project, the assets belong to the state-owned assets, and the project that has been pledged is not suitable for the declaration of special bonds, so in the process of special bond review, all localities will focus on reviewing whether there are duplicate pledges and duplicate financing problems in the project assets, and at the same time, there shall be no agreement with financial institutions to give priority to the repayment of market-oriented financing.
(3) Sub-account management:One of the key points of the review of portfolio financing projects is the management of separate accounts, that is, the project should separately calculate the repayment of principal and interest of special bonds and market-oriented financing, and meet the requirements of special bonds and bank loans for the multiple of the principal and interest coverage ratio of the project.
(4) The reporting entity must be an enterpriseDue to the mandatory requirement that the administrative unit shall not borrow debts and provide guarantees in any way, the reporting entity of the portfolio financing must be the enterprise.