2024 extra long term special treasury bonds will be launched this week

Original title: 2024 super long term special treasury bonds issued this week

Source: Beijing Youth Daily

Original title: 2024 super long term special treasury bonds issued this week

Source: Beijing Youth Daily

2024 extra long term special treasury bonds will be launched this week

In particular, the coupon rate of book entry treasury bonds is determined through competitive bidding

The highly concerned super long term special treasury bonds finally landed. On May 13, the Ministry of Finance announced the arrangement for the issuance of general treasury bonds and ultra long term special treasury bonds in 2024. The 1 trillion yuan ultra long term special treasury bonds planned to be issued this year are divided into three categories: 20 years, 30 years and 50 years. Among them, there are 7 for 20-year period, 12 for 30-year period and 3 for 50-year period, all of which pay interest half a year.

According to the arrangement, the Ministry of Finance will issue 2024 ultra long term special treasury bonds (Phase I) (30-year term) through public bidding on May 17, with a total face value of 40 billion yuan. The coupon rate will be determined through competitive bidding. This treasury bond will be distributed from the end of bidding to May 20, 2024, and will be listed for trading from May 22. What we need to remind you is that the ultra long term special national debt to be issued is bookkeeping national debt, not the recently favored savings national debt. After listing, book entry treasury bonds can be traded in the national inter-bank bond market and the bond market of stock exchanges.

China has previously issued three special government bonds

Prior to this, China has issued three special national debts in history, respectively in 1998, 2007 and 2020. In 1998, 270 billion yuan of special treasury bonds were issued to the four major state-owned banks to supplement the capital of wholly state-owned commercial banks; In 2007, another 1.55 trillion yuan of special national debt was issued as the founding capital of the State Foreign Exchange Investment Corporation; In 2020, we will issue 1 trillion yuan of special national debt for epidemic prevention.

Dong Ximiao, the chief researcher of China Merchants Association, said that as the fourth special national debt issued by China, this issuance of ultra long term special national debt has three meanings. First, it will stimulate investment, expand consumption and help build a modern industrial system; Second, it helps to reduce the leverage ratio of local governments and prevent local debt risks; Third, boost market confidence, stabilize expectations, and accelerate the recovery of the macro-economy.

The first installment of treasury bonds pays interest every half a year

According to the issuance arrangement, this year's ultra long term special treasury bonds will be issued from May 17 to the middle of November, and the interest will be paid half a year.

Specifically, this year, seven 20-year super long-term special bonds will be issued, of which two will be issued for the first time and five will be issued for the second time, as early as May 24; 12 30-year ultra long term special bonds, including 3 for the first time and 9 for the second time, which were first issued on May 17; Three 50 year ultra long term special government bonds, including one for the first issue and two for renewal, were issued as early as June 14.

On May 13, the Ministry of Finance also issued the Notice on Issues Related to the Issuance of Ultra Long term Special National Debt (Phase I) in 2024 (hereinafter referred to as the Notice). The Notice clearly states that the current treasury bonds are 30-year fixed rate interest bearing bonds with a total face value of 40 billion yuan through competitive bidding, and the coupon rate is determined through competitive bidding. The interest of the current treasury bond will be calculated from May 20, 2024, and the interest will be paid semi annually. The interest payment dates are May 20 (postponed on holidays, the same below) and November 20 of each year. The principal will be repaid and the last interest will be paid on May 20, 2054. The competitive bidding will be held from 10:35 a.m. to 11:35 a.m. on May 17, 2024, and will be issued through the government bond issuance system of the Ministry of Finance. The current treasury bonds will be distributed from the end of bidding to May 20, 2024, and will be listed for trading from May 22.

The Notice clearly states that the bidding of the current treasury bonds shall be carried out in accordance with the Rules for the Issuance of Bookkeeping Treasury Bonds through Bidding. The Notice is issued to members of the book entry bond underwriting syndicate, the Central Government Securities Depository and Clearing Co., Ltd., China Securities Depository and Clearing Co., Ltd., China Foreign Exchange Trading Center, Shanghai Stock Exchange and Shenzhen Stock Exchange.

Bookkeeping national debt is quite different from savings national debt

Due to the obvious decline of bank deposit interest rates, the once neglected savings bonds have become the "hot cakes" in the eyes of individual investors. Recently, every issue of savings bonds has been "sunny" due to the shortage of supply, and many bank outlets even sold out within half an hour.

At present, the national debt issued in China can be divided into savings national debt and bookkeeping national debt. The ultra long term special treasury bonds issued this time are bookkeeping treasury bonds, which are significantly different from savings treasury bonds in terms of investor groups, trading methods, liquidity, interest payment methods, etc. Bookkeeping national debt is a kind of national debt that records the creditor's rights in the form of electronic bookkeeping, is issued by the Ministry of Finance to all kinds of investors in the whole society, and can be registered, reported for loss, listed, circulated and transferred.

Savings bonds are mainly for individual investors, and bookkeeping bonds are widely applicable to various investors, including individuals and institutions. Savings government bonds are mainly purchased through bank outlets and e-banking channels. Bookkeeping government bonds can be traded at both banks and stock exchanges. Investors need to open accounts at securities companies. The interest rate of savings bonds has been determined at the time of issuance, which is usually higher than the deposit interest rate of the same period; The nominal interest rate of the book entry national debt needs to be determined through the bidding of the members of the book entry national debt underwriting syndicate, which is generally lower than the interest rate of the savings national debt in the same period.

Savings bonds are not negotiable and transferable, but in order to meet the liquidity needs of investors, an early redemption mechanism is provided, which usually requires payment of a certain service fee; Bookkeeping treasury bonds have good liquidity. Investors can trade in the securities market like speculating in stocks, and their prices fluctuate with the market. Generally, the change of market interest rate will affect the price of bookkeeping bonds. If the market interest rate rises, the price of bookkeeping bonds will fall; If the market interest rate falls, the price of book entry treasury bonds will rise. Investors should bear corresponding risks.

This special treasury bond is issued in a market-oriented manner

Can individual investors subscribe to ultra long term special treasury bonds? The insiders believe that it should also be determined according to the issuing objects of specific bond batches. From past experience, in 1998, special government bonds were issued to institutions, while in 2020, special government bonds for epidemic prevention were explicitly encouraged to be subscribed by individuals and investors of small, medium-sized and micro enterprises. Like the general bookkeeping national debt, the epidemic resistant special national debt is not only listed and circulated in the inter-bank bond market, but also cross market listed and circulated in exchanges and counters, and can also be purchased by individual investors.

Feng Lin, director of the research and development department of Orient JC, believes that from the perspective of bidding arrangements, this special bond issue should be market-oriented rather than targeted. The adoption of market-oriented issuance can not only reflect the determination to promote market-oriented pricing of bond issuance, but also help mobilize various social funds to participate in the construction of major projects in key areas. (Reporter Cheng Jie)

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