Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Viewpoints - In 2025, the bond market showed a volatile trend. The yields of government bonds and credit bonds first rose, then fell, and then fluctuated higher. The credit spreads first narrowed and then widened. The default risk continued to decline, mainly concentrated in real - estate bonds of private enterprises. The risk of implicit rating downgrade in the ChinaBond market increased, and the recovery rate of defaulted bonds remained low [9][36][37] Group 3: Summary by Directory 1. Valuation Curve: Yields Widely Oscillated Upward - By December 31, 2025, the yields of 1 - year Treasury bonds, 10 - year Treasury bonds, and 10 - year CDB bonds changed by 25BP, 17BP, and 27BP respectively; the yields of 3 - year AAA, 3 - year AA+, 3 - year AA, and 3 - year AA - changed by 15BP, 8BP, 9BP, and - 41BP respectively. The credit spreads of 3 - year AAA, 3 - year AA+, 3 - year AA, and 3 - year AA - narrowed by 4BP, 12BP, 11BP, and 61BP respectively. Overall, yields of various maturities generally rose, and credit spreads of major maturities and ratings of credit bonds narrowed, with lower - grade and shorter - term credit spreads narrowing more. The 10 - 1 curve flattened [10][11] 2. Treasury Bond Yields Oscillated Higher - The bond market in 2025 can be divided into several stages. From January to mid - March, due to tightened money supply, short - term yields rose rapidly. After the Two Sessions in March, the 10 - year Treasury bond yield reached a high of 1.90%. From late March to April, the 10 - year Treasury bond yield dropped to the 1.63% - 1.67% range. From May to June, long - end yields fluctuated slightly. From July to September, yields oscillated upward, showing a "bear steepening" pattern. From October to December, yields showed an oscillating trend [2][12][16] 3. Credit Spreads - All Grades of Credit Spreads First Narrowed and Then Widened - In 2025, credit spreads first fluctuated and narrowed, then slightly widened. In the first half of the year, they mainly narrowed, and in the second half, they widened with the bond market correction. Short - end credit spreads had a smaller correction range [17][19] 4. The Risk of Implicit Rating Downgrade in the ChinaBond Market Increased - In 2025, the amount of credit bonds with implicit rating downgrades in the ChinaBond market was 865.5 billion, with a significant year - on - year increase. The total amount of implicit rating upgrades was 422.2 billion, significantly lower than the previous year. The proportion of urban investment bonds in the upgraded and downgraded samples decreased compared with the previous year [25] 5. Default Risk Generally Declined, and the Default Rate of Real - Estate Bonds Declined - In 2025, there were 9 new first - time defaulting issuers. According to the broad default standard, the default amount was 17.5 billion, and the default rate was 0.04%, with a significant decline year - on - year. Defaulting entities were mainly concentrated in real - estate bonds of private enterprises, and the default rate of real - estate bonds and private enterprises both declined [27][30] 6. The Recovery Rate Remained Low - In 2025, defaulted bonds recovered 24.53 billion in principal. From 2014 to the present, defaulted bonds have paid a total of 129.4 billion in principal, and the payment rate of overdue principal was 12.4% [32]

Investment Rating of the Reported Industry No information provided in the given content. Core Views of the Report - In the first three quarters of 2025, the bond market yield showed an "N"-shaped trend. Credit bond yields fluctuated similarly to government bond yields, with overall wide - range volatile upward movement. Credit spreads first narrowed and then widened slightly. Default risk continued to decline, with default entities concentrated in real - estate bonds, mainly private enterprises. The amount of credit bonds with a downgraded implied rating in the ChinaBond market increased year - on - year, while the amount of upgraded ones was lower than the same period last year [9][37][38]. Summary by Relevant Catalogs Valuation Curve: Yields Fluctuated Widely and Rose - As of September 23, 2025, the yields of 1 - year Treasury bonds, 10 - year Treasury bonds, and 10 - year China Development Bank bonds changed by 30BP, 20BP, and 30BP respectively. The yields of 3 - year AAA, 3 - year AA +, 3 - year AA, and 3 - year AA - changed by 22BP, 13BP, 8BP, and - 25BP respectively. The credit spreads of 3 - year AAA, 3 - year AA +, 3 - year AA, and 3 - year AA - narrowed by 11BP, 21BP, 26BP, and 59BP respectively. Overall, the yields of medium - short - term and long - term interest - rate bonds and most credit bonds increased, and the credit spreads of various varieties narrowed, with lower - grade and shorter - term credit spreads narrowing more. The 10 - 1 curve flattened [10]. Treasury Bond Yields Presented an "N"-shaped Trend - **January - mid - March**: At the beginning of the year, the central bank suspended Treasury bond trading and reduced open - market investment to stabilize the exchange rate. The tightened capital led to an upward trend in bond market yields. After the Two Sessions, the market adjusted its expectations, and the 10 - year Treasury bond yield reached a high of 1.90% [11][12]. - **Late March - April**: The capital became looser, and the Sino - US tariff "tug - of - war" began. The 10 - year Treasury bond yield dropped to the 1.63% - 1.67% range [16]. - **May - early July**: In early May, the central bank's RRR cut and interest rate cut, along with positive results from tariff negotiations, led to a slight increase in long - end interest - rate bond yields. In June, the central bank's reverse - repurchase operations improved the capital situation, and bond yields fluctuated downward [16]. - **Mid - July - September**: The "anti - involution" policy raised inflation expectations, the equity market strengthened, and the bond market was suppressed. Bond yields rose, but short - end yields were stable, resulting in a "bear steep" pattern [16]. Credit Spreads - Credit Spreads of All Grades First Narrowed and Then Widened - **January - mid - March**: At the beginning of January, interest - rate bonds quickly adjusted upward, and credit spreads were passively narrowed. Before the Two Sessions, the market expected an RRR cut and interest rate cut, and credit spreads widened briefly. After the Two Sessions, credit spreads narrowed rapidly again [17]. - **Late March - April**: The bond market recovered quickly, and credit spreads widened slightly [17]. - **May**: Credit spreads narrowed to the lowest point of the year due to the implementation of monetary policy tools and looser capital [17]. - **June - early July**: Short - end Treasury bond yields declined, and credit spreads first widened slightly and then narrowed [17]. - **Mid - July - September**: The bond market adjusted, and credit spreads widened slightly [17]. The Risk of Downgraded Implied Rating in the ChinaBond Market Increased - In the first three quarters of 2025, the amount of credit bonds with a downgraded implied rating in the ChinaBond market was 764.1 billion, a significant year - on - year increase. The amount of upgraded credit bonds was 358 billion, significantly lower than the same period last year. The proportion of urban investment bonds in the upgraded and downgraded samples decreased both year - on - year and quarter - on - quarter [21]. Default: Default Risk Decreased, and the Default Rate of Real - Estate Bonds Declined - In the first three quarters of 2025, there were 3 new first - time default issuers. According to the broad default definition, the default amount was 6 billion, and the default rate was 0.01%, with the annualized default rate decreasing significantly compared to previous years. Default entities were mainly concentrated in real - estate bonds, mostly private enterprises. The real - estate bond default rate was 0.2%, and the default scale and annualized default rate decreased both year - on - year and quarter - on - quarter. The private enterprise default rate was 0.5%, and the annualized default rate continued to decline quarter - on - quarter [24][31]. Recovery Rate Remained Low - In the first three quarters of 2025, defaulted bonds recovered 20.76 billion in principal. From 2014 to the present, defaulted bonds have repaid 124.7 billion in principal, and the repayment rate of overdue principal was 11.9% [34].