[Zheshang Bank FICC·Credit Bond Daily] Primary supply warms up

Market Conditions

In the primary market, a total of 44 new bonds were issued today in the interbank market, with a total issuance scale of 46.09 billion yuan. In terms of bond types, there were 15 ultra-short-term financing bonds totaling 25.9 billion yuan, 1 short-term financing bond totaling 500 million yuan, 22 medium-term notes totaling 14.7 billion yuan, and 6 targeted tools (PPNs) totaling 4.99 billion yuan. Today’s primary issuance supply rebounded, with both the number of issuances and the total amount issued doubling. The overall bond offerings were mainly issued at a discount. The specific pricing details are as follows:

90D26 Binhu Construction SCP007 issuance rate is 1.6%, with an undervaluation of 2.7 basis points; 3Y26 Guangxi Energy MTN002 issuance rate is 1.89%, with an undervaluation of 17 basis points; 3Y26 Nantong Coastal PPN001 issuance rate is 1.98%, with an undervaluation of 2.6 basis points.

The number of credit bond transactions remained unchanged from yesterday at 1,591, still at a relatively low level since the beginning of the year. The average undervaluation across the market was 0.9 basis points, with no obvious increase in market activity. Meanwhile, the bid-to-cover ratio decreased from 81.14% yesterday to 75%, reflecting a cooling in market participation and weakened buyer bidding willingness. Short-term financing and medium-term notes were mainly bought by funds, with banks, insurance companies, securities firms, and wealth management products also participating; corporate bonds were primarily purchased by funds and wealth management products, with long-term bonds additionally involving insurance companies. From the deviation analysis, credit bonds across all grades and maturities generally traded at a discount, with AA-rated bonds showing larger deviations—1Y and below, 1-3Y, and 3-5Y maturities at discounts of 1.65bp, 1.74bp, and 2.19bp respectively. AAA-rated bonds showed relatively moderate deviations, with the largest deviation in the 1-3Y segment at 1.81bp.

Market Summary

Today’s credit bond market saw a rebound in primary supply, with issuance quantities and amounts doubling and many at a discount. Secondary trading remained stable but at low levels, with generally discounted transactions and yield divergence. The buying activity was mainly driven by funds, with banks, insurance companies, and other institutions participating as well. In related markets, easing tensions in Iran boosted equity markets by 1.46%. It is expected that the short-term credit bond market will remain stable, but attention should be paid to geopolitical developments and liquidity changes.

Market Data

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