自贸离岸债时隔两年有望重启，“两头在外”原则成亮点

Core Viewpoint - The People's Bank of China announced the potential restart of the issuance of Free Trade Zone Bonds (FT Bonds), which aims to enhance financing channels for enterprises involved in the Belt and Road Initiative and those going global [1][2]. Development Stages - The development of FT Bonds can be divided into three stages: 1. Policy preparation period starting from August 2013 with the establishment of the Shanghai Free Trade Zone [2]. 2. Market initiation period beginning in May 2016 with the first issuance of FT Bonds, but no further issuances until 2019 [2]. 3. Expansion period from 2019 to 2023, where the issuance of FT Bonds surged, with 126 bonds issued in 2023 alone, totaling 85.636 billion yuan, more than double the total issuance in 2022 [2][5]. Financing Function - In 2023, FT Bonds demonstrated a significant "substitute financing function," with a notable increase in issuance due to tightened regulations on other financing methods for local government financing vehicles [5][6]. Regulatory Changes - The issuance of FT Bonds was halted in mid-2023 due to discrepancies between regulatory intentions and market realities, where a high concentration of issuers were local government financing vehicles, leading to increased credit risk [7][8]. Market Dynamics - The market for FT Bonds saw a shift in 2023, with the issuance primarily dominated by local government financing vehicles, which accounted for 77% of the total issuers, while participation from private and foreign enterprises remained low [7][8]. Future Outlook - The potential restart of FT Bonds will likely come with stricter requirements, focusing on ensuring that both issuers and investors are from offshore markets, thereby enhancing the "two ends abroad" model [10][11]. - The future development of FT Bonds is expected to be more internationalized, targeting high-credit-rated enterprises involved in the Belt and Road Initiative, with AAA-rated companies likely to dominate the market [12].