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Bond Market News
[The latest social finance data was released. Credit in January was better than expected, funds may remain tight balance, and the one-year government bond interest rate rose by 11BP]
On February 14, the central bank released January financial data showing that China’s RMB loans increased by 5.13 trillion yuan in January, an increase of 210 billion yuan over the same period last year, better than market expectations. The increase in social financing scale in January 2025 was 7.06 trillion yuan, 583.3 billion yuan more than the same period last year, which was also better than market expectations. Under the scope of social finance, loans to the real economy increased by 5.22 trillion yuan, an increase of 379.3 billion yuan year-on-year; net financing of government bonds was 693.3 billion yuan, an increase of 398.6 billion yuan year-on-year. The growth rate of existing social finance in January was 8%, which was the same as the previous month. After the financial data was released at 17:00 that day, the yield of treasury bonds rose further. The one-year bond bond finally rose by 11BP on the day, and the yield of the 10-year bond bond also rose by 2.1BP.
Institutions remain cautious about the sustainability of the credit recovery, but the economy has recovered steadily, the pace of monetary easing is also uncertain, and funds remain tight. The current bond market can focus on short-term credit bonds, long-term bonds or wait until the market returns to expectations for monetary easing.
[The three major AMCs are assigned to Central Huijin Holdings Experts at the same time: In the future, they may focus more on the main business and return to policy functions]
On February 14, China Cinda, Orient Assets, and Great Wall Assets successively announced that the controlling shareholder would be changed from the Ministry of Finance to Central Huijin. At this point, the transfer of the three major state-owned AMCs into state-owned financial capital trusteeship institutions has finally come to fruition. At the same time, major state-owned banks such as Industry, Agriculture, China, Construction, and Communications have also issued intensive announcements that 66.7% of the equity of China Securities and Finance Co., Ltd. is planned to be transferred to Central Huijin, and the shares of major state-owned banks held by Central Huijin will also change accordingly. In the view of industry experts, the transfer of relevant equity to Huijin aims to optimize the governance structure of state-owned financial institutions through equity adjustment and strengthen the centralized management and resource integration capabilities of state-owned capital. It does not change the nature of China Cinda, Great Wall Assets and Orient Assets as major financial asset management companies. In the future, AMC will further focus on the disposal of non-performing assets and the resolution of financial risks, and return to policy functions.
[The bidding rate for the third phase of the Ministry of Finance closed last Friday. The bid rate for the 50-year variety was 1.907%]
On February 14, the bidding for the third phase of the Ministry of Finance ended. Among them, the weighted winning yield of the 10-year treasury bond “25 interest-bearing treasury bond 04” was 1.61%, and the marginal winning yield was 1.63%. The full-court multiple was 2.76 and the marginal multiple was 4.43; The weighted winning bid yield of the 1-year treasury bond “25 interest-bearing treasury bonds 01(renewed)” is 1.2866%, the marginal winning bid yield is 1.3844%, the full-court multiple is 2.23, and the marginal multiple is 1.64; the weighted winning bid yield of the 50-year treasury bond “24 interest-bearing treasury bonds 07(renewed)” is 1.907%, the full-court multiple is 3.65, and the marginal multiple is 1.18.
[China’s central bank successfully issued RMB 60 billion in central bank bills in Hong Kong]
On February 14, China’s central bank successfully issued RMB 60 billion yuan of central bank bills in Hong Kong, including a three-month issuance amount of 40 billion yuan, with a winning bid rate of 2.6%, a one-year issuance amount of 20 billion yuan, and a winning bid rate of 2.32%.
[More than 35 billion yuan of funds are purchased to buy back land and many cities launch special debt collection and storage plans]
After the Spring Festival of the Year of the Snake, many places announced plans to recover idle land from special land reserves bonds. Guangzhou Nansha Planning and Self-Governing Bureau recently posted an online announcement on the list and purchase prices of the first batch of land used for local government special bond projects in the land reserve field in Nansha District in 2025. A total of 8 land cases were recovered, and the total land area repurchased is about 400,000 square meters, and the price exceeds 880 million yuan. According to incomplete statistics from the China Index Institute, as of February 11, the total number of land repurchased involved in announcements by cities such as Foshan, Huizhou, Zhuhai, Zhongshan, and Jiangmen exceeded 160, with a land use area exceeding 6.8 million square meters, and the proposed purchase price The total exceeds 35 billion yuan. Among them, Huizhou’s proposed purchase price exceeds 12 billion yuan, ranking first; Zhuhai’s proposed purchase price is 6.65 billion yuan, ranking second.
[Bond investment ushers in AI transformation]
After DeepSeek’s stunning appearance, many bond practitioners are trying to use it to assist in investment. After debugging and evaluating multiple scenarios, Lu Pin, chief analyst of fixed income at Debon Securities, believes that overall, in terms of decision-making needs, the DeepSeek convertible bond market strategic framework can meet the basic requirements of convertible bond analysis without giving any hints. If prompted, a framework of “supply and demand changes + terms game + industry allocation + risk control” can be given. After using role-playing prompts or analytical prompts, the logical framework becomes clearer. In terms of analytical needs, DeepSeek still needs user training and multiple reminders on financial data and technical terms.
“For convertible bond practitioners, the core competitiveness comes from the ability to think independently. They can not only judge whether information and opinions are correct or not, but also follow market trends and give independent opinions. At present, it is still difficult for the AI model to replace the work of researchers in the short term.” Lu Pin said. In addition, a brokerage asset management investment manager also tried to use AI models to provide himself with investment strategies. The investment manager revealed that when he gave multiple instructions such as determining investment goals, analyzing market trends, screening bond targets, and monitoring investment opportunities, the investment strategy given by AI was still relatively vague. From the bond conversion strategy framework to smart transaction execution, industry insiders generally believe that AI technology will bring new opportunities to the bond market by integrating massive data and optimizing investment portfolios. However, experts also warned that independent thinking and professional judgment are still irreplaceable core competencies.
[The wind of passive investment blows to the bond market]
Bond ETFs are experiencing explosive development, and passive investment in fixed-income assets has become a new trend in the market. Data shows that the scale of market-wide bond ETFs has exceeded 200 billion yuan, which will promote the bond market’s investment transformation into indexation and transparency. Industry insiders said that bond ETFs are not only convenient for trading and low rates, but also meet the needs of risk diversification and asset allocation. They are expected to usher in greater development opportunities in the future with technological innovation and favorable policies.
[It has been repeatedly seen that bond underwriting violations have been violated, and three more securities firms have been punished. The business must be done without being “dragged down” by the issuer]
On February 14, the official website of the China Securities Regulatory Commission issued three fines in one day, taking corrective measures against Minsheng Securities and Southwest Securities respectively, and issuing warning letters to Zhongtai Securities. Judging from the reasons for violations, the main problems are imperfect internal control of bond businesses, irregular due diligence, and irregular issuance and underwriting. Although equity underwriting business has always been a key area of supervision, the issue of violations in bond underwriting business cannot be ignored. Against the background of strict supervision, in 2024, while the bond market emerged from the bull market, related violations also attracted great attention from the regulatory authorities.
[I once stepped on “contemporary” bonds, and another 180 million yuan in assets were executed. Various doubts resurfaced]
According to Tianyan, Shoupu Assets has been listed as the person subject to execution by the Shanghai Financial Court, with an execution target of 182 million yuan. The filing date is February 11 this year. It is reported that a company is listed as a person subject to execution, which means that after the court judgment or arbitration award came into effect, the company failed to perform relevant obligations in accordance with the content determined in the legal document, so it was designated by the court as an object that needs to perform specific obligations. There is a market view that this 182 million yuan is similar to the 200 million yuan loss caused by Wenfeng’s subsidiaries in October 2021 due to the subscription of Shoupu Assets ‘private equity products. The direct reason for this loss was that the product was fully stocked in “contemporary” bonds. After the “contemporary” bonds fell into the debt whirlpool, the value of the bonds held was directly “cleared”. According to the official website, Shoupu Assets focuses on bond investment business. The private placement was established in January 2018 and completed registration in September of the same year. The management scale is 1 – 2 billion yuan. The last update of institutional information in the China Foundation was September last year. Three months after Wenfeng shares were warned by the regulatory authorities, a warning letter was also issued by the regulatory authorities for failing to carefully verify the relationship between the investors and the investment target and failing to fulfill their obligations of prudence and diligence.
[Jiangsu, Jiangxi and Xinjiang plan to issue 100 billion yuan, 54.39657 billion yuan and 21.6 billion yuan of refinancing special bonds respectively to replace existing hidden debts]
On February 14, the Jiangsu Province Department of Finance announced that in 2025, Jiangsu Province local government refinancing special bonds (Phases 1 to 4) plan to issue a total of 100 billion yuan, with an issuance period of 10-year, 15-year, 20-year, and 30-year. The funds raised will be invested in replacing existing implicit debts, and tenders will be held on February 21. The Jiangxi Province Department of Finance announced that it has decided to issue 2025 Jiangxi Province local government refinancing special bonds (three to five tranches), with a total amount of 54.39657 billion yuan, to replace existing hidden debts. The tender will be issued on February 21 and interest will begin on February 24. The Department of Finance of the Xinjiang Uygur Autonomous Region announced that it will tender for the issuance of 21.6 billion yuan of special refinancing bonds on February 21 to replace existing hidden debt, and interest will begin on February 24.
[Xianyang City: Strictly implement the negative list of government debt financing in 2024, clear the hidden debts of municipal platforms]
The 2025 government work report of Xianyang City shows that in 2024, the negative list of government debt financing will be strictly implemented, and the hidden debts of municipal platforms will be cleared. Seize and make good use of the “white list” financing policy, and complete the tasks of “guaranteed delivery of buildings” and “guaranteed delivery of houses” as planned.
[Chen Maobo: Debt issuance and financing promotes accelerated infrastructure development in the northern metropolitan area]
The Financial Secretary of the Hong Kong Special Administrative Region Government, Paul Chan, published a blog on the 16th, saying that accelerating the development of the northern metropolitan area is the key to Hong Kong seizing the opportunities of technological change. The SAR government will raise funds by issuing government bonds to ensure that the progress of projects in the northern metropolitan area will not be restricted by the public finances. Chen Maobo said that Hong Kong needs to accelerate the construction of the northern metropolitan area, provide sufficient space and infrastructure, attract technology companies to settle in Hong Kong, increase the scale of their R & D or high-end manufacturing business in Hong Kong, and seize the opportunities brought by the rapid development of cutting-edge technologies. In the next few years, projects related to the northern metropolitan area will be launched one after another. Coupled with other important infrastructure projects related to people’s livelihood, the SAR government’s project expenditure will enter a peak period. He said that issuing bonds to support infrastructure projects and invest in the future is a common and common international practice. Hong Kong’s debt level remains low. Looking around some advanced economies, the ratio of government debt to GDP exceeds 100%. In comparison, Hong Kong’s current relevant ratio is only about 9.3%. Even if it increases slightly, it is still a stable level.
[Investment-grade bond issuance by 15 U.S. issuers fell to US$17.6 billion]
New bond issuance fell to $17.6 billion in the week ended February 14, down 64% from $48.5 billion in 30 transactions in the previous week. So far this month, the supply of new bond issues reached US$66.1 billion, compared with US$102.6 billion a month ago; year-to-date issues were US$267.7 billion, compared with US$289.7 billion a year ago. Biggest deals: Eli Lilly Co issued $6.5 billion and Canadian BCE Inc issued $2.25 billion.
open market：
In terms of the open market, the central bank announced that in order to maintain sufficient liquidity in the banking system, it launched a 98.5 billion yuan 7-day reverse repurchase operation on February 14 through fixed interest rates and quantity bidding, with an operating interest rate of 1.50%. Wind data shows that 183.7 billion yuan of reverse repurchase expired that day. This week, the central bank will have 1,044.3 billion yuan in reverse repos due in the open market, of which 229 billion yuan, 33 billion yuan, 558 billion yuan, 125.8 billion yuan, and 98.5 billion yuan will expire respectively from Monday to Friday. In addition, another 500 billion yuan MLF expired on Tuesday (February 18).
Credit debt event
■ Sino-Ocean Group: The hearing of the liquidation petition was postponed to April 14;
■ China Chengxin: Downgraded the credit rating of Xuerong Biological Subject and “Xuerong Convertible Bonds” from A+ to A;
■ “20 TEDA 01” Holders ‘Meeting: The proposal to pay principal and interest in advance was reviewed and approved;
■H21 Automobile 1: A holders ‘meeting will be held on February 18, 2025 to review the procedural requirements of the exemption meeting and the proposal to accelerate settlement;
■ Beijing Energy International: It plans to issue the first batch of panda bonds during the year, with a scale of no more than 1.5 billion yuan;
■ Gemdale Group: “22 Gemdale MTN001” plans to pay the principal and interest on February 23;
■23 Tenghai Investment MTN001: The application period for resale is from February 17, 2025 to February 21, 2025, and the coupon rate is reduced by 430BP to 1.00%;
■23 Pingxiang Investment and Development MTN001: The coupon rate will be lowered by 508BP to 0.50%, and the resale application period will be from February 14 to February 20, 2025;
■ Guangxi Liuzhou Investment Control: It is planned to reduce the coupon rate of “22 Liuzhou Investment MTN001” by 365BP to 1%, and the application for resale will start from February 17;
■22 Henan Agricultural Development MTN002: The coupon rate will be lowered by 270BP to 1.00%, and the resale registration period will be from February 18 to February 24, 2025;
■ Guangzhou Yuexiu Group: The redemption amount of “20 Guangyue 02” is 300 million yuan, which will be redeemed on February 24 and delisted in advance.
market dynamics：
[Money market| Money market interest rates mostly rise]
Last Friday, money market interest rates mostly rose. Among them, the weighted average interest rate between banks and depositors pledged repo rose by 5.0BP to 1.9135% in a one-day period, setting a new high of more than a month. The seven-day period rose by 12.13BP to 1.9412%, the 14-day period rose by 12.71BP to 1.9451%, and the one-month period rose by 6.94BP to 1.9339%.
Shibor short-end varieties collectively went up. Overnight varieties rose 6.2 BP at 1.889%;7-day period rose 13.1 BP at 1.894%;14-day period rose 15.4 BP at 1.969%;1-month period rose 1.2 BP at 1.731%.
The interbank market repurchase fixing interest rates rose across the board, with FDR001 reporting 1.9000%, up 7.00 basis points from the previous day; FDR007 reporting 1.9300%, up 13.00 basis points from the previous day; FDR014 reporting 1.9000%, up 10.00 basis points from the previous day.
Inter-bank market repurchase fixing rates rose across the board, with FR001 reporting 2.0300%, up 20.00 basis points from the previous day; FR007 reporting 2.0000%, up 20.00 basis points from the previous day; FR014 reporting 2.0000%, up 15.00 basis points from the previous day.
[Interest rate debt| Treasury bond yields are all green, with one-year varieties rising by 10bp]
Last Friday, treasury bond futures closed down across the board, with the 30-year main contract down 0.45%, the 10-year main contract down 0.25%, the 5-year main contract down 0.16%, and the 2-year main contract down 0.09%.
The yields of major interest-rate bonds between banks rose across the board. As of 16:30 pm, the yield of 10-year treasury bond active bonds 240011 rose by 1.2bp to 1.635%, the yield of 30-year treasury bond active bonds 2400006 rose by 1.5bp to 1.85%, and the yield of 10-year state-opened active bonds 240215 rose by 1.85bp to 1.67%.
Industry insiders told the Financial Union that the market reaction to the fourth quarter of last year’s cargo policy report released late on the 13th was neutral and short, and the bond market generally rose in early trading. On the 14th, the central bank and the Ministry of Finance conducted a tender for fixed deposits of treasury funds of 90 billion yuan. During the day, funds continued to be tight. The market generally expected better performance. The bond market’s decline widened in the afternoon, and the interest rate on active bonds of 30-year government bonds exceeded 1.85% in intraday trading.
[Credit debt| The yield of credit bonds rose collectively, with nearly 90 billion yuan traded throughout the day]
Last Friday, credit bond yields collectively rose, rising by 3 basis points for the one-year period, with nearly 90 billion yuan in transactions throughout the day. Vanke bonds were mixed, with “23 Vanke MTN003” rising more than 5%, and “22 Vanke 06” and “21 Vanke 06” falling more than 2%. Among AAA-grade medium and short-term notes, the 1-year yield rose by 3 basis points to 1.83%. Among AA-grade medium and short-term notes, the 1-year yield rose by 3 basis points to 1.97%; among AAA-grade urban investment bonds, the 1-year yield rose by 2.29 basis points to 1.8462%. Among AA-grade urban investment bonds, the 1-year yield rose by 2.29 basis points to 1.9701%.
A total of 9 credit bonds increased by more than 2%, among which “24 Beijing Capital Investment MTN001A”,”23 Vanke MTN003″ and “23 Dongfang Guangyi 02” ranked among the top three, up 6.09%, 5.47%, and 4.8%, respectively, with transactions of 63.1738 million yuan, 10.2 million yuan, and 42.3484 million yuan respectively.
A total of 4 credit bonds fell more than 2%.”22 Beichen Technology PPN001″,”22 Wanke06″ and “21 Wanke06” ranked among the top three declines, down 3.1%, 2.86%, and 2.34% respectively. The three bonds were sold at 3.063 million yuan, 23.6099 million yuan, and 5.186 million yuan respectively.
High-yield bonds: A total of 4 credit bonds with yields higher than 15% were traded. The yields of “22 Vanke GN001″,”23 Vanke MTN003” and “23 Vanke MTN001” were among the top, with yields of 16.67%, 16.57%, and 15.95%, respectively, with transactions of 54.35 million yuan, 10.2 million yuan, and 82.694 million yuan. There are 8 credit bonds with yields in the range of 8%-15%. Among them, the yields of “22 Wanke06″,”22 Wanke04” and “23 Tianan Coal Industry MTN001 (Science and Technology Innovation Notes)” rank among the top three, respectively. 9.72%, 9.43%, and 9.21%, and the deviations from the valuation of China Bond are-466.86 bp,-516.05 bp, and 681.15 bp respectively. The transactions of the three bonds are 23.6099 million yuan and 1.4389 million yuan respectively. 7.0303 million yuan.
[European bond market| European bond yields generally closed higher, with British 10-year bond yields rising 1 basis point to 4.501%]
Last Friday, European bond yields generally closed up. The British 10-year bond yield rose 1 basis point to 4.501%, the French 10-year bond yield rose 1.6 basis points to 3.170%, and the German 10-year bond yield rose 1.3 basis points to 2.431%, the Italian 10-year bond yield rose 2.9 basis points to 3.519%, and the Spanish 10-year bond yield rose 2.8 basis points to 3.059%.
Last Friday, U.S. bond yields fell across the board. The two-year U.S. bond yield fell 4.57 basis points to 4.2589%, the three-year U.S. bond yield fell 5.91 basis points to 4.2695%, and the five-year U.S. bond yield fell 6.38 basis points to 4.3274%, the 10-year U.S. bond yield fell 5.26 basis points to 4.4762%, and the 30-year U.S. bond yield fell 4.36 basis points to 4.6963%.
