A few days ago, the Ministry of Finance, the Ministry of Natural Resources, the People's Bank of State Taxation Administration of The People's Republic of China and China jointly issued the document [202 1] 19, which uniformly transferred four government non-tax revenues, including the income from the transfer of state-owned land use rights, to the tax authorities for collection. The new regulations will be piloted first and then promoted. From July 65438, 20265438, Hebei, Inner Mongolia, Shanghai and other places were selected to carry out the pilot transfer of tax collection and management responsibilities, which was fully implemented on June 1 2022.
When this new policy came out, it not only triggered the debate on the end of "land finance" in the market, but also changed the allocation strategy of asset management institutions for urban investment bonds.
"Previously, the loose capital superposition market expected that the issuance of urban investment bonds would be tightened in the second half of the year. At the end of April, we were still adding short-term urban investment bonds with low rating and high coupon. With the release of 19, related operations were quickly stopped by the headquarters. " The investment director of the fixed income products department of a trust company told the reporter of 2 1 Century Business Herald that the risk control department of the headquarters believed that due to the influence of Circular 19, the cash flow of some low-credit city investment companies tightened, and the corresponding bond redemption risk increased.
CICC's collection team recently released a report pointing out that since the beginning of this year, the probability of lowering the credit rating of investment bonds in regional cities with shrinking financing capacity or weak financial resources has increased significantly. Specifically, the cases of credit rating downgrade of urban investment bonds in Yunnan, Ningxia, Tianjin, Chongqing and Shaanxi have increased.
"The publication of Circular 19 has further increased the probability that the rating of urban investment bonds in these areas will be lowered." A private placement bond trader pointed out. His private equity fund decided not to include the investment bonds of prefecture-level cities in the central region in the investment pool for the time being.
265438+20 th Century Business Herald learned from many sources that in order to avoid the risk of cash flow tightening of some urban investment companies, more and more asset management institutions such as private equity funds and trusts flock to urban investment bonds with strong financial strength and government funds. One is the urban investment bonds in Jiangsu and Zhejiang provinces, where government funds account for a high proportion of the general public budget revenue, and the other is the urban investment bonds issued by provincial urban investment companies in Shandong, Hubei, Shaanxi and Jiangxi.
"To some extent, document 19 is giving birth to a new round of credit differentiation of urban investment bonds." The investment director of the fixed income products department of the above trust company said.
The capital turnover chain of city investment company is limited.
"As the land transfer fee collection department is placed under the tax department, it is likely to affect the expanding capital turnover chain of land acquisition-return-financing of city investment companies in recent years." Liu Yu, chief analyst of GF Securities, said.
265438+20 th Century Business Herald reporters learned from many sources that at present, urban investment companies mainly participate in land transfer in three ways: one is agent construction, that is, local governments or soil storage departments entrust urban investment platforms to carry out agent construction; Second, the government allocates land for urban investment for the construction of public welfare projects; The third is bidding, auction and hanging, and the city investment platform obtains land by participating in open bidding. It is generally believed in the industry that the publication of document 19 has a great influence on the capital turnover of land acquisition by city investment companies through "bidding, auction and hanging".
The reason is that in the past, when the city investment platform participated in the land auction by bidding, auction and hanging, some local governments would return part of the land transfer fee to the city investment platform after transferring the land, or allow the city investment platform to postpone the payment of the land transfer fee, so that the cash flow of the city investment company was sufficient to pay the corresponding principal interest of the city investment bonds. Nowadays, the collection of land transfer fees is placed under the tax department, and it is difficult for city investment companies to enjoy the above-mentioned "welfare" given by local governments, which leads to the tightening of their capital chain.
"At present, we are strengthening the monitoring of the changes in the capital chain of the city investment company." The director of fixed income series operation of a large domestic private equity fund revealed to reporters. Specifically, on the one hand, they conducted a new round of due diligence on the types of urban investment bonds to be invested, and removed all the types of urban investment bonds returned by the government from the investment pool; On the other hand, for the types of urban investment bonds that have been invested, it is important to monitor the payment of land transactions through bidding, auction and hanging in the past. Once it is found that the issuing enterprises of urban investment bonds have delayed payment, we will clear the positions as soon as possible to avoid risks.
In addition, his private equity institution has also adjusted the upper limit of a single city investment bond position for currency enhanced products from 3% to 1.5%.
The reporter of 265438+20th Century Business Herald learned that some private equity funds even adopt "one size fits all" hedging measures, and will not allocate urban investment bonds with a credit rating of AA or below or with the risk of downgrade.
"In order to avoid the potential risk of lightning, the risk control department requires that the domestic credit rating of urban investment bonds should no longer be referenced, but the credit rating of urban investment bonds in overseas offshore markets should prevail." The above-mentioned director of fixed income series operations of private equity funds revealed that this made it impossible for them to allocate urban investment bonds issued by most municipal-level urban investment companies in the central region.
He objected to this, thinking that this move may miss the allocation opportunities of some high-quality city investment bonds. However, the risk control department believes that the relatively conservative investment strategy is the safest before the market comprehensively and accurately evaluates the impact of document 19 on the liquidity of capital chains of various city investment companies.
"This means that we have just invested in AA-level cities for more than a month and were forced to clear their positions." He said helplessly.
The "involution" effect of high-rated city investment bonds
The director of operation of the above-mentioned collection series of private equity funds said that under the influence of Circular 19, more and more asset management institutions invested in urban investment bonds in Jiangsu and Zhejiang provinces with relatively strong local financial resources, and the allocation of urban investment bonds was "involuted".
"The annualized rate of return on three-year urban investment bonds in some prefecture-level cities in Jiangsu and Zhejiang has dropped to around 4%, and there are still a large number of asset management institutions vying to buy them." He pointed out. If the yields of these urban investment bonds continue to decline, many bond asset management products may encounter upside-down returns and liabilities, that is, the return on investment obtained by investors is lower than the financing cost of debtors.
In order to avoid the phenomenon of upside down, asset management institutions began to adopt long-term strategies to increase income and bought a large number of long-term urban investment bonds in Jiangsu and Zhejiang provinces. At present, the transaction period of urban investment bonds has reached 2.6 years, setting a new high in the year.
The investment director of the above-mentioned trust company's fixed income products department admits that the strategy of long-term allocation of high-credit city investment bonds may not create high enough income. At present, the premium rate of some private debt with poor liquidity and no pledge in Jiangsu and Zhejiang has been reduced to about 20 basis points, indicating that the looting behavior of institutions has made "everyone have no good fruit to eat".
He told reporters that they are currently planning to get involved in some "missing" investments. That is, looking for some investment bonds of central prefecture-level cities that have been wrongly allocated. After investigation, it is found that some investment bonds of central prefecture-level cities are not affected much by document 19, and the capital chain is in good condition. However, due to the tightening of institutional risk appetite, bond prices have fallen, and bargain-hunting may obtain excess returns at this time.
"However, the city investment bonds that have been' wrongly killed' may not always appear, and the missed investment may not always succeed." The investment director of the product department said. Behind this, another important influence of document 19 is easily overlooked. In the past, these local governments injected funds into the city investment company by returning land transfer fees. Now that this capital turnover path has been blocked, the probability that the city investment company will receive government financial support is further reduced, which leads to an increase in the risk that the city investment bonds will not be paid in time.