the difference between provincial funds and special bonds:

1. The same name but different quality, the bond elements and rating concerns of local government special bonds and enterprise special bonds are different. For special bonds that can also be used for infrastructure financing, they are different in terms of bond elements, issuance quota, use of raised funds and sources of debt repayment funds. From the point of view of rating concern, the credit level of local government special bonds mainly depends on the stability and sufficiency of government fund income or special income generated by the project, supplemented by the credit evaluation of local government entities. The corporate bonds are supplemented by regional economic and financial strength, focusing on the profitability of city investment or industrial companies.

2. Corporate special bonds have not been generally financed by project income. The projects of local government special bonds are highly targeted, and it is still necessary to continue to pay attention to the closed-loop flow of funds. Although the original intentions of the two types of innovative products are related to specific projects, there is still a certain distance from the pure project income bonds in the issuance practice. At present, the sources of funds and repayment of the pilot special bonds for soil storage and toll roads are all earmarked, and the projects are highly targeted. However, due to the poor mechanism of lending from provincial governments to lower-level governments, it is still necessary to continue to pay attention to the use of funds and the daily dynamics of debt repayment. However, in the stock of corporate special bonds, issuers generally use 3%-5% of raised funds to supplement working capital, which fails to realize the closed-loop flow of funds in project financing and income. Therefore, it will take time to completely get rid of the dependence on subject credit and rely on project income to realize financing.