Our reporter Bao Xing’an
On December 12, the Ministry of Finance announced that the Ministry of Finance issued 750 billion yuan of special treasury bonds on December 12, with a coupon rate of 2.48%. the open market.
According to the Finance Ministry’s announcement, the current special treasury bills are issued in the domestic interbank bond market to the relevant domestic banks and can be listed and traded. The current special treasury bill is a fixed-rate interest-bearing bond with a term of 3 years. It is planned to issue 750 billion yuan, and the actual issuance is 750 billion yuan. The coupon rate is 2.48 %. The interest of the current special treasury bill is paid annually, and the interest is paid on December 12th of each year (the holiday is postponed), and the principal is repaid and the last interest is paid on the 12th December 2025.
On December 10, the head of the Ministry of Finance said that 750 billion yuan of the 2007 special national debt of 2007 will soon mature in December 2022. With the approval of the State Council, the Ministry of Finance will continue the practice of 2017 and continue to issue 750 billion yuan of special treasury bonds in 2022 to relevant banks in a phased manner, and the funds raised will be used to repay the principal of the 2007 special treasury bonds that matured in that month.
It is worth noting that the maturity of the “07 Special National Bond 07” is 15 years and the coupon rate is 4.45%, while the duration of the renewed national bond is only 3 years and the coupon rate is 2. 48%. This means that the duration of the rolling special treasury bills has been significantly shortened and the interest rate has been significantly lowered.
Wang Qing, the chief macro analyst at Oriental Jincheng, told the “Securities Daily” reporter that the issuance rate is mainly driven by the central bank’s two interest rate cuts this year. Despite the recent rebound in government bond yields, overall they are still at a low level. The interest rate of the special treasury bonds issued this time is 2.48% and the cost of issuing has decreased, which is also reflected in the optimization of the public debt structure.
Speaking of the market impact, the head of the Ministry of Finance said that the issuance of special treasury bonds in 2022 will be issued in a market-oriented manner, strictly in accordance with relevant laws and regulations, and will be issued to relevant banks in the domestic interbank bond market. The issuance process will not involve social investors. Individuals cannot buy. The 2022 Special Treasury Bill is a rolling issue of the same amount as the 2007 Special Treasury Bill, which still matches the original assets and liabilities and will not increase the tax deficit.
He Daixin, director of the Financial Research Bureau of the Financial Strategy Research Institute of the Chinese Academy of Social Sciences, told the “Securities Daily” reporter that 750 billion yuan of special treasury bonds are being issued to institutions, and the liquidity has not changed significantly. For institutions, it helps to enrich the investment structure and asset structure.
Wang Qing said that the special treasury bonds issued this time are not newly issued, so they will not increase the size of government debt. However, the continued issuance of special treasury bills at present still causes widespread concern in the market, reflecting the political intention to maintain a positive fiscal stance. This will help ease the strain on tax revenues and expenditures this year, provide the financial support needed for steady growth at the end and beginning of the year, and especially help the central government maintain its ability to regulate funds and reduce debt repayment pressure.
“In general, special treasury bonds are issued in response to special circumstances and circumstances. The issuance of special treasury bonds next year will depend on the needs of economic and social development. All parties can pay attention to the needs of fiscal policy next year, to budget deficits, and debt issuance.” Daixin said.
(edited by: Wen Jing)
