affected by yongmei's default, the number and scale of cancelled/postponed issuance of credit bonds (hereinafter collectively referred to as cancelled issuance) in the primary market increased sharply.
Prior to this, the cancellation of bonds was the largest in 217, mainly with AA entities, with few AAA entities. The main reason for canceling the issuance at that time was that the overall market interest rate rose and credit risk events occurred frequently, which led to a decline in market risk appetite. The cancellation of this bond issuance is mainly based on AA+ and AAA high-grade issuers, and local state-owned enterprises account for a relatively large proportion.
according to Wind data, before yongmei defaulted, the scale of credit bonds cancelled this year was 435.5 billion. The scale of cancellation of issuance in recent January was nearly 1 billion, and the net financing amount of credit bonds in November was negative for the first time in the year, and the turning point of social financing may come.
on November 26th, CCCC No.4 Aviation Bureau, whose main rating is AAA, announced that "No.24 Aviation Y1" was originally scheduled to be put on record on November 27th, 22. However, due to the recent large fluctuation in the bond market, in order to control the financing cost of the company, the issuer decided to postpone the issuance through consultation with the lead underwriter and investors, and the specific issuance time will be determined separately.
The investment manager of a fund company in North China said that although the city investment belief has not been completely broken, it is no longer indestructible. Some areas in the north, such as northeast, northwest, Henan and other places, will choose the best; If the financial situation is poor and the industry is a cyclical traditional industry, it is mainly to wait and see. In a short period of time, it may be difficult to issue some bonds.
The person in charge of the financing department of an AAA city investment company in Jiangsu said that investors are more cautious in their investment decisions because of recent market fluctuations. As a AAA subject, the company does not want to open the bond interest rate ceiling. In addition, the company's own funding arrangements are relatively abundant, so it chose to cancel the issuance of bonds.
from the perspective of enterprise types, it is not only enterprises in Henan that are blocked from refinancing in the primary market, but also coal enterprises such as Yangquan Coal Industry and Shanxi Coal Import and Export Group in Shanxi have successively cancelled bond issuance, and the issuance of urban investment bonds in other regions has also been affected.
Wind data shows that four bonds in Henan province were cancelled during this period, namely "2 Shang Gu 3" issued by Shangqiu Ancient City Protection Development and Construction Company, "2 Kaifeng City Transportation MTN1" issued by Kaifeng City Operation and Investment Group, "2 Henan Transportation MTN7" issued by Henan Transportation Development Company and "2 Xinhui Bonds" issued by Xinhui Construction and Investment Company.
According to statistics, during this period, the cancellation and issuance of credit bonds were concentrated in Beijing, Guangdong, Jiangsu and other provinces and cities that issued more credit bonds. The three places involved 15.4 billion, 1.85 billion and 1.7 billion respectively, totaling 36.32 billion, accounting for about 4% of the cancellation and issuance scale during this period. This means that the impact of credit risk events is not limited to the areas where credit events occur, but affects the issuance of the overall regional credit bond market with the fermentation of market sentiment.
in terms of the nature of enterprises, local state-owned enterprises account for the largest proportion, reaching 13, accounting for nearly 8%. From the perspective of the industry to which the enterprise belongs, there are many capital goods industries, and many capital goods industries are local city investment enterprises. According to statistics, during this period, 74 urban investment corporate bonds were cancelled, with a scale of 47.3 billion. This may be because Yongmei makes the market reprice the implicit support of the government, and it is more difficult for the city to invest and issue bonds relying on the implicit support of the government.
The person in charge of the financing department of an AAA-level city investment company in a central province said that it is now waiting for the market to pick up and will not launch long-term bonds such as winning the bid in the near future. At present, the company still has some reserves of short-term financing projects, and is communicating with the main contractor, and may consider starting short-term financing first. "The term is short and the market acceptance will be higher."
Huang Weiping, chief fixed-income analyst of Industrial Securities, said that the weighted issuance period of credit bonds, especially industrial bonds, was significantly shortened. Judging from the bidding enthusiasm, the difference between the bidding ceiling of credit bonds and coupon rate continued to decline, which reflected the low subscription mood in the primary market.
"The default event of credit bonds has begun to affect entity financing. If the default shock is further interpreted, the credit contraction will accelerate, and the turning point of social financing may come ahead of schedule." Huang Weiping said.
Credit bond financing is an important part of social integration. In the first ten months of this year, the large-scale issuance of corporate credit bonds drove the growth rate of social financing to continue to rise. According to the data of the central bank, the stock of social financing scale at the end of October was 281.28 trillion yuan, a year-on-year increase of 13.7%. Among them, the balance of corporate bonds and government bonds increased by more than 2% year-on-year.
however, in November, the net financing amount of credit bonds was negative for the first time in the year. Wind data shows that the net financing amount of credit bonds in November was-29.1 billion, and the scale of local debt issuance also declined in the same period. Under the influence of the two, the growth rate of social integration in November may fall back. The growth rate of social integration has been rising since February this year, from 1.7% in February to 13.7% in October.
in terms of time periods, after the meeting of the Finance Committee, the scale of cancellation of issuance of credit bonds declined, and the net financing increased steadily, which to some extent reflected the marginal weakening of panic among issuers and investors. The market believes that with the passage of time, the market pessimism caused by Yongmei's default is expected to further decline.
On November 21st, the Finance Committee held its 43rd meeting to study the work of standardizing the development and maintaining the stability of the bond market. The meeting proposed that we should improve our political stance and earnestly fulfill our responsibilities. Financial supervision departments and local governments should proceed from the overall situation, resolutely safeguard the authority of the legal system, implement supervision responsibilities and territorial responsibilities, urge various market players to strictly perform their main responsibilities, and establish a good local financial ecology and credit environment. The meeting also proposed to severely punish all kinds of "evasion of debts" and protect the legitimate rights and interests of investors.
according to Wind's statistics, the net financing scale of credit bonds in the second week of Yongmei's default (November 16th-November 22nd) was-18.9 billion, and it was-4 billion from November 23rd to November 29th, and it recovered to 5.8 billion last week (November 3th-December 6th). According to statistics, the cancellation scale of credit bonds after the meeting of the Finance Committee was 37.6 billion, only 38% of the cancellation scale in recent January.
a research report of huachuang securities said that after the statement of the finance Committee, the market is expected to stabilize, and the performance of interest rate bonds and credit bonds has picked up. However, from a long-term perspective, this round of credit shock may bring further aggravation of credit stratification. The grade spread between AA- and AA-level continues to expand, indicating that the market is more fully pricing the credit risk of weak qualifications than before.
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