On May 12, the local municipal bonds of Guangdong Provincial Government were successfully issued through the Ministry of Finance-SZSE government bond issue system, setting a record for the number in a single issuance and the total number of local municipal bonds. This is the first issuance of local municipal bonds at SZSE since the outbreak of COVID-19. It is another important achievement for SZSE to give full play to its role as a hub of the capital market, to support for coordinating the pandemic control and economic and social development, and to advance the development of the Guangdong-Hong Kong-Macao Greater Bay Area and the new Shenzhen demonstration pilot zone for socialism with Chinese characteristics.
SZSE attached equal importance to both pandemic prevention and control and market services. Under the joint guidance of the Ministry of Finance and the CSRC, we took multiple measures, coordinated multiple parties and made thorough plans to strengthen the field support for the local municipal bond issuance during the pandemic. We divided the work into work flow, staffing, system operation and maintenance, market organization, anti-pandemic arrangements and so on. Given the large scale and bond quantity of this issuance, we made sure that the services at every link were orderly connected. In addition, we also ensured the health and safety of personnel and the smooth operation of the system to provide high-quality, convenient and efficient tender and issuance services.
The issuance of Guangdong local municipal bonds included one tranche of general bonds and 32 tranches of special bonds, totally amounting to CNY 103.51 billion, covering a wide range of maturity of 7Y, 10Y, 15Y, 20Y and 30Y. This included CNY 71.2 billion of the new special bonds that the country has assigned ahead of schedule. The funds raised are mainly used for expenditures on several key projects such as the development of the Guangdong-Hong Kong-Macau Greater Bay Area, transportation infrastructure, agriculture, forestry and water conservancy, ecological and environmental protection, basic public services, municipal and industrial park infrastructure. The issue also includes innovative bonds such as the country’s first special bond for new infrastructure construction and the country's first green special bond for water resources. Tranches of bonds were issued with an interest rate 25 BPs higher than the benchmark. The underwriting syndicate consisting of 68 financial institutions was actively involved in the issuance, with a cumulative tender scale of CNY 1.7 trillion. Where, the total tender amount of securities companies in the underwriting syndicate was CNY 1.27 trillion and the underwriting amount was CNY 7.246 billion.
At present, in accordance with the decisions and arrangements of the CPC Central Committee and the State Council, SZSE earnestly implements the task requirements of the CSRC on the high-quality development of the bond market, and continuously improves the tender and issuance services for local municipal bonds with pandemic control measures on a regular basis. We give full play to the direct financing function of the capital market, ensure safe operation, and, through concrete actions, improve service quality to support the work and production resumption of enterprises and resume work and normal life at a fast pace.
