1. Report Industry Investment Rating No information about the industry investment rating is provided in the report. 2. Core Viewpoints of the Report - The behavior of institutional investors has become a core variable influencing the short - to medium - term trends and operation rhythm of the credit bond market. The steepening of the yield curve, prominent structural market conditions, and intensified differentiation of credit spreads may be the core characteristics of the market [1][7]. - In 2026, the short - to medium - term trends and operation rhythm of the credit bond market will still be dominated by institutional behavior. The marginal behavioral changes of funds, wealth management, and insurance, the three core institutional investors, will reshape the market pattern in terms of term structure, spread trends, and variety differentiation [3][7][51]. 3. Summary According to the Table of Contents 3.1 Fund: Significant Behavioral Elasticity Driven by Liabilities, Further Deepening of Instrumental and Structural Features in 2026 3.1.1 Core Bond Allocation Features: Dominated by Liabilities, Focus on Duration and Leverage - The redemption pressure on the liability side directly determines the asset - side allocation, leading to pro - cyclical trading behavior. A positive feedback loop exists between fund net value and investor redemptions. In a rising bond market, funds increase leverage and duration to allocate more credit bonds; in a falling market, forced selling occurs due to redemption pressure [11]. - The leverage ratio is subject to regulatory constraints, and duration adjustment is highly correlated with market conditions and liability - side pressure. The regulatory upper limits for the leverage ratio of open - end and closed - end bond funds are 140% and 200% respectively. Duration adjustment varies with market conditions and the stability of the liability side [11][12]. - Policy changes and concentrated product maturities in 2025 directly triggered significant fluctuations in fund bond allocation behavior. After the release of the fund fee regulations in September 2025, funds sold off bonds in advance. In November, the net purchase of credit bonds increased due to the maturity of amortized cost - method bond funds [12]. 3.1.2 Instrumental Trend Prominent in 2026, Sustained Structural Impact - Under the new fee regulations, product substitution effects are evident. Short - term trading becomes more instrumental, and medium - to long - term allocation focuses on performance. Bond ETFs and inter - bank certificate of deposit funds have replaced traditional short - term bond funds, increasing short - term credit bond trading activity and volatility. Medium - to long - term pure bond funds focus on duration timing and variety selection [15]. - The opening rhythm of amortized cost - method bond funds in 2026 remains a key variable, driving the structural market of credit bonds. Concentrated openings will lead to increased demand for 3 - 5 - year high - grade ordinary credit bonds, while dispersed openings will have a milder impact. The concentrated maturity periods in 2026 are March, May, June, and July [17]. - Pay attention to potential policy benefits for credit bond and sci - tech innovation bond ETFs. Scale expansion will drive the valuation repair and liquidity improvement of constituent bonds. As of March 24, 2026, the scale of 24 sci - tech innovation bond ETFs decreased by 8.91 billion yuan compared to the end of 2025, but the relative value of constituent bonds is prominent [20][23]. 3.2 Wealth Management: Challenges of Full Net - Value Transformation 3.2.1 Core Bond Allocation Features: Focus on Allocation, Weakened Trading, and Significant Seasonal Bond Allocation Patterns - Wealth management's bond allocation strategy is mainly hold - to - maturity, with weakened trading attributes. The allocation willingness is positively correlated with credit spreads. After the net - value transformation in 2022, wealth management shifted from trading to hold - to - maturity due to investors' low tolerance for net - value fluctuations. The bond - buying and - selling rhythm is affected by bank's seasonal balance - sheet returns, liability - side stability, and primary - market bond issuance [26][28]. - Seasonal bond allocation patterns are clear, and there are opportunities for short - term spread compression in specific windows. At the beginning of each quarter (April, July, October), there are usually opportunities to compress the credit spreads of short - term high - grade credit bonds such as 1 - year AAA inter - bank certificates of deposit and 2 - year - or - less AAA bonds [29]. 3.2.2 In 2026, Stabilizing Net Value is the Core, and the Direction of Fund Flows is Key - Under full net - value transformation, the function of wealth management as a stabilizer in the bond market is weakened, and low - volatility and high - liquidity assets are preferred. In a rising bond market, wealth management will moderately increase credit bond allocation without excessive leverage and duration extension; in a falling market, it will shorten duration and increase low - volatility asset holdings. This will intensify the term differentiation in the credit bond market [30]. - The peak of high - interest deposit repricing maturity will affect the demand structure of credit bonds. If funds flow into wealth management after high - interest deposits mature, it will support short - term high - grade credit bonds; if funds flow into the equity market, it may cause short - term disturbances in the bond market [34]. 3.3 Insurance: Stock - Bond Rebalancing in 2026 3.3.1 Core Bond Allocation Features: Liability - Driven Long - Term Allocation, Bond Allocation Rhythm Affected by Multiple Factors - Insurance funds have long - term liabilities with rigid costs, and premium income shows seasonal characteristics with a slowdown in growth. Insurance funds need to allocate long - term assets to match asset - liability duration. Premium income is concentrated in January, and the proportion of dividend - paying insurance may increase [39]. - The bond allocation rhythm is driven by multiple factors, with a significant characteristic of timing allocation at interest - rate peaks. Insurance funds prefer to participate in primary - market bond subscriptions, especially for long - term local government bonds and credit bonds. They also consider deposit yields and market interest rates when allocating bonds [40]. - Asset - side allocation is diversified, with local government bonds as the core allocation. After the contraction of non - standard assets, insurance funds are actively seeking alternative assets such as ultra - long - term interest - rate bonds, local government bonds, fixed - income plus products, and overseas fixed - income assets. Insurance funds have significant pricing power for long - term credit bonds [44]. 3.3.2 Stock - Bond Rebalancing + New Accounting Standards in 2026, More Cautious Allocation Style - In a low - interest - rate environment, stock - bond rebalancing is initiated, increasing the proportion of equity asset allocation and restricting the incremental allocation of pure bonds. This may weaken the承接 force for long - term credit bonds, widen the spreads of long - term credit bonds, and intensify term differentiation in the credit bond market [47][49]. - After non - listed insurance companies fully implement the new accounting standards in 2026, the preference for Tier 2 and perpetual bonds may further shrink, and credit risk appetite will be more cautious. This will intensify the grade spread differentiation and liquidity stratification in the credit bond market [50]. 3.4 Outlook on the Core Trends of the Credit Bond Market with Institutional Behavior Reshaping the Landscape - The credit bond yield curve will continue to steepen, and the ability to absorb long - term bonds may be limited. Wealth management focuses on short - term high - grade low - volatility assets, funds focus on short - to medium - term trading, and insurance may reduce long - term bond positions, leading to a steeper yield curve and potential widening of long - term credit spreads [51]. - Product innovation and maturity rhythms will drive a structural market, which will be the mainstream feature in 2026. The maturity rhythm of amortized cost - method bond funds will determine the phased allocation opportunities for 3 - 5 - year high - grade ordinary credit bonds, and the scale expansion of credit bond and sci - tech innovation bond ETFs will drive the valuation repair of constituent bonds [51][52]. - Changes in insurance allocation preferences may put continuous pressure on Tier 2 and perpetual bonds and low - to medium - grade credit bonds. The new accounting standards will affect the preference for Tier 2 and perpetual bonds, and the credit risk appetite of insurance will be more cautious, intensifying the grade spread differentiation [52].

Core Viewpoint - The overall yield in the credit bond market has declined, with a notable divergence in credit spreads, indicating varying performance across different credit segments [2] Group 1: Market Overview - The report covers the weekly tracking of the credit bond market from March 16, 2023, to March 22, 2023, highlighting the trends in yield and credit spreads [2] - A general downward trend in yields suggests a potential easing of credit conditions, which may influence investment strategies [2] Group 2: Credit Spread Performance - Credit spreads have shown significant variation, with some segments performing better than others, reflecting differing levels of risk and investor sentiment [2] - The divergence in credit spreads may present both opportunities and challenges for investors looking to navigate the current market landscape [2]

Group 1 - The core view of the report indicates that the spread of credit bond ETFs is primarily influenced by two factors: market sentiment and calendar effects. Recent trends show that the spread of credit bond ETFs continues to recover due to strong certainty in the short to medium credit market [7][8]. Group 2 - In the primary issuance segment, net financing has increased. For the week of March 16 to March 20, 2026, short-term financing issued amounted to 1190.2 billion yuan, while maturing debt was 1100.1 billion yuan. The total issuance of major credit bond varieties reached 3824.3 billion yuan, with net financing of 949.7 billion yuan, an increase from the previous week [16]. Group 3 - In the secondary trading segment, transaction volume increased, and the overall term spread widened. During the same week, major credit bond varieties had a total transaction volume of 9214 billion yuan, an increase of 865 billion yuan from the previous week. The yields on medium-term notes decreased overall, with the 3-year AAA medium-term note yield down by 1.9 basis points to 1.78% [19][20].

Report Industry Investment Rating - Not provided in the report Core Viewpoints - The 2026 government work report sets the tone for a moderately loose monetary policy, with an overall optimistic expectation for the capital market. The "asset shortage" pattern in the current credit bond market remains unchanged, and institutional allocation demand still has inertia. However, considering that March is the end of the quarter, wealth management funds may face the pressure of returning to the balance sheet, and the allocation demand for credit bonds by wealth management may decrease marginally or even create a certain selling pressure. Given that the credit spreads of different varieties are at historically low levels, the odds and cost - effectiveness of extending the duration to obtain capital gains at this stage are relatively limited. It is recommended to focus on the stable returns of high - coupon assets or conduct moderate credit sinking within the medium - short duration to increase returns [4][43] Summary by Directory 1. This Week's Credit Hot Events - Tianneng Holdings issued the first "technology + green" dual - labeled corporate bond by a private enterprise in the inter - bank market. On March 16, 2026, "Tianneng Holdings Group Co., Ltd. 2026 First - Phase Private Placement Green Technology Innovation Bond" was successfully issued, with a scale of 500 million yuan and a term of 1 year, providing direct financial support for the company's technological innovation and green transformation [9] - Sunac Group was ruled to bear joint and several liability in a financial non - performing creditor's rights dispute case. On March 18, 2026, Sunac Real Estate Group Co., Ltd. announced that it would bear joint and several liability for a debt of 1.031 billion yuan, which would have a certain adverse impact on its production, operation, and solvency [10] - Jianye Real Estate forecast a loss of 2.8 - 3.2 billion yuan in 2025. Affected by the economic situation and the continuous downturn of the real estate market, the company estimated inventory and accounts receivable impairment provisions, and the decrease in real estate revenue recognition and gross profit margin failed to cover the company's cost and expense expenditures [11] 2. Primary Market - Credit bonds (excluding asset - backed securities) had a net financing of 84.2 billion yuan this week, a decrease of 33.7 billion yuan compared with last week. The total issuance volume was 443.7 billion yuan, an increase of 25 billion yuan compared with last week, and the total repayment volume was 359.5 billion yuan, an increase of 58.7 billion yuan compared with last week. The net financing of asset - backed securities was 23.2 billion yuan, an increase of 27.6 billion yuan compared with last week [12] - By product type, the net financing of urban investment bonds was - 3.8 billion yuan, a decrease of 21.5 billion yuan compared with last week; the net financing of industrial bonds was 92.7 billion yuan, an increase of 14.4 billion yuan compared with last week; the net financing of financial bonds was - 4.7 billion yuan, a decrease of 26.7 billion yuan compared with last week [12] - In terms of the number of issuances and redemptions, the number of urban investment bond issuances decreased by 2, and the number of redemptions increased by 12; the number of industrial bond issuances increased by 45, and the number of redemptions increased by 33; the number of financial bond issuances decreased by 1, and the number of redemptions decreased by 1 [15] 3. Secondary Market 3.1. Trading Situation - The trading volume of credit bonds (excluding asset - backed securities) increased by 64.5 billion yuan compared with last week. Among them, the trading volume of urban investment bonds was 269.6 billion yuan, an increase of 38.9 billion yuan compared with last week; the trading volume of industrial bonds was 395.9 billion yuan, an increase of 46 billion yuan compared with last week; the trading volume of financial bonds was 477.5 billion yuan, a decrease of 20.4 billion yuan compared with last week. The trading volume of asset - backed securities was 1.93 billion yuan, an increase of 0.84 billion yuan compared with last week [17] - In terms of turnover rate, the turnover rates of urban investment bonds and industrial bonds increased compared with last week, while the turnover rate of financial bonds decreased slightly. The turnover rate of urban investment bonds was 1.73%, an increase of 0.26 percentage points compared with last week; the turnover rate of industrial bonds was 1.99%, an increase of 0.22 percentage points compared with last week; the turnover rate of financial bonds was 3.03%, a decrease of 0.13 percentage points compared with last week. The turnover rate of asset - backed securities was 0.53%, an increase of 0.23 percentage points compared with last week [17] 3.2. Yield - Short - term credit bonds continued to perform well this week, with yields continuing to decline. Specifically, the yields of 1Y AA, AAA -, and AAA + credit bonds decreased by 3BP, 2BP, and 3BP respectively compared with last week; the yields of 5Y AA and AAA + credit bonds decreased by <1BP and 1BP respectively compared with last week, while the yield of 5Y AAA - credit bonds increased by 1BP; the yields of 10Y AA, AAA -, and AAA + credit bonds increased by 1BP compared with last week [20] - Taking AA + - rated 5Y bonds of each variety as an example, the yields of different varieties fluctuated slightly this week. Among them, the yields of privately - issued industrial bonds and perpetual industrial bonds decreased by <1BP compared with last week; the yield of AA + - rated 5Y urban investment bonds decreased by 1BP compared with last week; the yields of commercial bank ordinary bonds and secondary capital bonds decreased by 3BP and 1BP respectively compared with last week; the yield of AA + - rated 5Y asset - backed securities increased by <1BP compared with last week [22] 3.3. Credit Spreads - Overall, the credit spreads of AA + steel and media industries compressed significantly compared with last week, while the credit spread of the AAA national defense and military industry widened compared with last week. Specifically, the credit spreads of AA + steel and media industries compressed by 12BP and 7BP respectively compared with last week, and the credit spread of the AAA national defense and military industry widened by 6BP compared with last week. The fluctuations of credit spreads of other industries and ratings compared with last week did not exceed 5BP [26] 3.3.1. Urban Investment Bonds - By term, the credit spreads of urban investment bonds of different terms fluctuated slightly within 2BP this week. Among them, the credit spread of 0.5 - 1Y urban investment bonds was 24BP, a compression of 1BP compared with last week; the credit spread of 1 - 3Y urban investment bonds was 33BP, a compression of 1BP compared with last week; the credit spread of 3 - 5Y urban investment bonds was 51BP, a compression of 1BP compared with last week; the credit spread of 5 - 10Y urban investment bonds was 54BP, a widening of 2BP compared with last week; the credit spread of urban investment bonds over 10Y was 35BP, a widening of <1BP compared with last week [28] - By region, except for a slight widening of credit spreads in a few regions, the credit spreads of urban investment bonds in most regions compressed. The top five regions with the highest AA - rated urban investment bond credit spreads were Guizhou, Yunnan, Jilin, Shandong, and Guangxi, with credit spreads of 199BP, 138BP, 110BP, 96BP, and 84BP respectively; the top five regions with the highest AA + - rated urban investment bond credit spreads were Guizhou, Shaanxi, Gansu, Inner Mongolia, and Yunnan, with credit spreads of 158BP, 95BP, 89BP, 79BP, and 76BP respectively; the top five regions with the highest AAA - rated urban investment bond credit spreads were Liaoning, Yunnan, Shaanxi, Jilin, and Guizhou, with credit spreads of 68BP, 52BP, 47BP, 46BP, and 41BP respectively [29][30] 3.3.2. Industrial Bonds - The short - term credit spreads of industrial bonds fluctuated narrowly at a low level this week, and the medium - and long - term spreads compressed slightly. Specifically, the credit spreads of 1Y AAA - and AA + privately - issued industrial bonds widened by <1BP compared with last week, the credit spread of 1Y AA privately - issued industrial bonds compressed by 2BP compared with last week, and the credit spreads of 10Y AAA -, AA +, and AA privately - issued industrial bonds compressed by <1BP compared with last week; the credit spreads of 1Y AAA - and AA + perpetual industrial bonds compressed by 1BP compared with last week, the credit spread of 1Y AA perpetual industrial bonds widened by <1BP compared with last week, and the credit spreads of 10Y AAA -, AA +, and AA perpetual industrial bonds compressed by <1BP compared with last week [34] 3.3.3. Bank Capital Bonds - The credit spreads of bank Tier 2 and perpetual bonds fluctuated narrowly within 5BP compared with last week. Specifically, the credit spreads of 1Y AAA -, AA +, and AA secondary capital bonds widened by 1BP, 1BP, and <1BP respectively compared with last week, and the credit spreads of 10Y AAA -, AA +, and AA secondary capital bonds compressed by 3BP, 4BP, and 4BP respectively compared with last week; the credit spreads of 1Y AAA -, AA +, and AA bank perpetual bonds widened by <1BP compared with last week, and the credit spreads of 10Y AAA -, AA +, and AA bank perpetual bonds compressed by 3BP, 3BP, and 3BP respectively compared with last week [37] 4. This Week's Bond Market Public Opinions - The credit rating of Dongfang Fashion Driving School Co., Ltd. was downgraded, and the rating of its "Dongshi Convertible Bond" was also downgraded; the implied rating of "GC Huanglong A" issued by Hangzhou Haifeng Western Restaurant Co., Ltd. was downgraded; the implied rating of "25 Nanshi 01" issued by Nanping Industrial Group Co., Ltd. was downgraded [40] 5. Investment Suggestions - This week, there were 176.5 billion yuan of reverse repurchases due in the open market. The central bank carried out a total of 242.3 billion yuan of reverse repurchase operations, and issued 180 billion yuan of treasury cash fixed - term deposits, with a net investment of 245.8 billion yuan for the whole week. Overall, the credit spreads of AA + steel and media industries compressed significantly compared with last week, while the credit spread of the AAA national defense and military industry widened compared with last week. For urban investment bonds, the credit spreads of different terms fluctuated slightly within 2BP this week. For industrial bonds, the short - term credit spreads fluctuated narrowly at a low level, and the medium - and long - term spreads compressed slightly. For bank capital bonds, the credit spreads of bank Tier 2 and perpetual bonds fluctuated narrowly within 5BP compared with last week [42]

1. Report Industry Investment Rating - No information about the industry investment rating is provided in the report. 2. Core Viewpoints of the Report - The long - and short - ends of the credit bond market are expected to "go their separate ways" and this situation may continue. Future long - term interest rates are unlikely to decline, while short - term interest rates are unlikely to rise. Credit bond short - ends are expected to continue to benefit, and although the spread protection is thin, it is also difficult to widen. In April, the support effect of wealth management's bond - allocation demand will soon appear. It is recommended to maintain the strategy of sinking the short - end of urban investment bonds and continue to earn the interest rate spread. Due to the redemption of fixed - income + products caused by the stock market adjustment, the selling pressure of secondary perpetual bonds has increased. Since no new secondary perpetual bonds have been issued this year, the impact of future concentrated supply needs to be prevented. Considering the performance of long - term interest rates, there are no obvious opportunities in the short term, and it is recommended to wait for the right - side layout [7][10]. 3. Summary According to Relevant Catalogs 3.1 Credit Bond Weekly Viewpoint - The Middle East situation last week significantly disturbed the equity market, and the bond market also fluctuated. In the first half, it took the opportunity to recover, and in the second half, it evolved into a situation of both stocks and bonds falling. In the future, inflation expectations and cross - quarter funding conditions should be mainly concerned. It is judged that long - term interest rates are difficult to decline and short - term interest rates are difficult to rise. Credit bond short - ends will continue to benefit, and it is recommended to maintain the short - end sinking strategy of urban investment bonds and continue to earn the interest rate spread. Secondary perpetual bonds face increased selling pressure, and there are no obvious short - term opportunities. It is recommended to wait for the right - side layout [7][10]. 3.2 Credit Bond Weekly Review 3.2.1 Negative Information Monitoring - There were no bond defaults or overdue events, no enterprises with their main body ratings or outlooks downgraded, and no bonds with their debt ratings downgraded from March 16th to March 22nd, 2026. However, on March 19th, S&P adjusted the rating outlook of China Jinmao Holdings Group Co., Ltd. from "stable" to "negative" and confirmed its "BBB -" long - term issuer credit rating. There were also several major negative events involving companies such as Sichuan Blu-ray Development Co., Ltd., Sunac Real Estate Group Co., Ltd., etc. [13][14]. 3.2.2 Primary Issuance - The primary issuance scale of credit bonds last week reached the highest value this year, with the repayment amount increasing simultaneously, and the net financing amount remained flat compared to the previous week. From March 16th to March 22nd, 2026, the primary issuance of credit bonds was 397.8 billion yuan, and the total repayment amount was 306.4 billion yuan, with a net inflow of 91.4 billion yuan. Four bonds were cancelled or postponed for issuance. The financing cost of high - grade bonds increased significantly, while that of medium - and low - grade bonds decreased. The average coupon rates of AAA and AA+ grades were 2.05% and 2.15% respectively, with a month - on - month increase of 12bp and a decrease of 7bp [15][16]. 3.2.3 Secondary Trading - The valuations of short - and medium - term credit bonds of all grades generally decreased by 2bp, while those of long - term bonds remained flat. The risk - free interest rates all decreased, resulting in the credit spreads of short - and medium - term bonds remaining flat or narrowing slightly and those of long - term bonds widening. The 3Y - 1Y term spreads of all grades remained flat, while the 5Y - 1Y term spreads widened comprehensively, especially the 5Y - 1Y spreads, which mostly widened by 2bp. The AA - AAA grade spreads remained flat or narrowed slightly, with the short - and medium - term spreads narrowing by 1 - 2bp except for the 5Y spread. The average credit spreads of urban investment bonds in each province narrowed by 1bp last week, with Inner Mongolia and Ningxia having a relatively large narrowing of 3bp. The spreads of industrial bonds in each industry remained flat or narrowed, similar to those of urban investment bonds. The weekly turnover rate increased by 0.23 percentage points to 1.97%. The issuers of bonds with a turnover rate in the top ten were mostly central and state - owned enterprises. The issuers of credit bonds with a discount of more than 10% in trading last week mainly involved Vanke. Among individual entities, the urban investment entities with the largest narrowing or widening of spreads were scattered, and among industrial entities, the top five entities with the largest widening of spreads were mostly real estate enterprises, including Rongqiao, Vanke, Greenland, and Xinyuan [18][20][25].

Report Summary 1. Investment Rating of the Industry The report does not mention the investment rating of the industry. 2. Core Viewpoints - The core contradiction has switched, and the balance of asset allocation continues. Bonds have entered a "sell on every rally" time window, and the interest rate curve is steepening [39][43]. - Pay attention to the potential impact of supply - demand pattern changes on the credit bond market. In the second quarter, focus on the potential incremental demand for credit bonds [3][45]. - Currently, the valuation of credit bonds may not be highly cost - effective, but the potential adjustment pressure is relatively controllable. Credit bonds will follow the adjustment rather than over - adjust [4][162]. - The credit strategy is to shift from reducing duration to controlling duration and from a defensive to an offensive stance [4][193]. 3. Summary by Directory 2026 Market Review - **Primary Market**: In 2026Q1 (as of March 15), the issuance and net supply of traditional credit bonds decreased quarter - on - quarter. Bank secondary perpetual bonds had no new issuance, and net financing turned negative. For traditional credit bonds, the issuance and net financing were 2428.1 billion yuan and 773.5 billion yuan respectively, with a slight decrease in net supply. For bank secondary perpetual bonds, there was no new issuance, 4.76 billion yuan of maturities, and negative net financing [8][15][31]. - **Secondary Market**: In Q1, credit bond yields declined across the board, and credit spreads mostly narrowed. In January, credit bonds strengthened; in February, the market oscillated; since March, the bond market has weakened, but credit bonds have shown resilience. Yields of various maturities decreased, and credit spreads mostly narrowed, with short - term secondary perpetual bonds having the largest narrowing amplitude [18][19][31]. 2026 March - May Market Outlook - **Bond Market Transition**: The core contradiction in the bond market has switched. Bonds have entered a "sell on every rally" time window, and the interest rate curve is steepening. The 10 - year Treasury yield may range from 1.77% to 1.95%, with a possibility of breaking above 1.9%. It is recommended to be cautious about long - term and ultra - long - term assets [39][43]. - **Supply - Demand Pattern**: - **Supply**: For general credit bonds, urban investment bonds have net inflows, and industrial bond supply remains strong. For financial bonds, there has been no new issuance of secondary perpetual bonds this year, and the supply of ordinary securities firm bonds has increased, but these extreme structural features are not sustainable [67][76][224]. - **Demand**: - **Wealth Management**: The scale was stable in Q1, with seasonal balance - sheet return pressure in March. The scale is expected to grow seasonally in Q2, and the demand is mainly for medium - and short - term bonds [82]. - **Funds**: The scale and structure of amortized cost bond funds are changing. Pay attention to the potential increment of "fixed - income +" funds, and credit bond ETFs may still have an impulse to increase volume at the end of the quarter [86][101][129]. - **Insurance**: The proportion of dividend - paying insurance in the insurance liability side has increased, and the demand for long - term bonds has decreased. The direct investment in credit bonds is strong, but the buying power has weakened marginally [138][141]. - **Other Potential Changes**: The credit spreads of ultra - long - term credit bonds with maturities over 5 years have declined, but the trading desks are still cautious. The optimization of inter - bank rules promotes the launch of science and technology innovation bond indices and index products, and there are potential opportunities in inter - bank science and technology innovation bonds [144][148][159]. - **Valuation and Adjustment Pressure**: Currently, the valuation of credit bonds may not be highly cost - effective, but the potential adjustment pressure is relatively controllable. Historically, when long - term interest rates rise and the 10 - 1Y term spread widens, credit spreads do not necessarily widen. In March, spreads may oscillate weakly, and there may be market opportunities from April to May [162][178][185]. - **Credit Strategy**: - **General Strategy**: In March, gradually switch from medium - term (3 - 5 years) to medium - and short - term (around 3 years) bonds, and from high - elasticity, low - safety - cushion varieties to low - elasticity, certain - safety - cushion varieties. Actively seize potential credit market opportunities from April to May while keeping the duration in check [193]. - **Urban Investment Bonds**: For bonds with a maturity of less than 3 years, increase returns through credit enhancement; for bonds with a maturity of more than 3 years, increase positions on dips [197][201][203]. - **Industrial Bonds**: Control the duration and focus on carry trades [207][212][213]. - **Bank Secondary Perpetual Bonds**: Generally, be cautious and wait and see. Pay attention to the participation opportunities of medium - and short - term secondary perpetual bonds of small and medium - sized banks [220][223].

1. Report Industry Investment Rating No information about the industry investment rating is provided in the report. 2. Core Viewpoints of the Report - The new regulations on science - innovation bonds are beneficial for scale expansion and structural improvement. With the optimization of rules in the inter - bank and exchange markets, along with support from the central bank's risk - sharing tools and local incentives, the scale of science - innovation bonds is expected to continue to expand this year, and the structure of issuers and maturities is likely to improve further [1][23]. - Last week, credit bond yields generally declined, and most credit spreads widened passively. The net financing of general credit bonds started to increase, while financial bonds maintained net repayment. In the secondary market, medium - and short - duration bonds were actively traded, and the trading of long - duration bonds increased slightly [1][42][68]. 3. Summary by Directory Credit Hotspots: New Regulations on Science - Innovation Bonds Benefit Scale Expansion and Structural Improvement - On March 2, 2026, the National Association of Financial Market Institutional Investors optimized the inter - bank science - innovation bond mechanism, broadening the scope of technology - based enterprises, strengthening patent requirements, and implementing hierarchical and classified management of the use of raised funds [1]. - Since the launch of the "technology board" in the bond market, the issuance of science - innovation bonds as a proportion of credit bonds has significantly increased. As of March 6, 2026, the outstanding amount of science - innovation bonds has exceeded 3.6 trillion yuan [1][22]. - With the optimization of rules and the improvement of supporting mechanisms, along with policy support, the scale of science - innovation bonds is expected to continue to expand this year, and the issuer and maturity structures are expected to improve [23]. Market Review: Credit Bond Yields Generally Declined, and Most Spreads Widened Passively - From February 27 to March 6, 2026, due to the end of the Two Sessions and the fermentation of the Iran situation, interest - rate bonds declined overall, credit bond yields generally decreased, and most credit spreads widened passively. The spreads of 5 - 10Y general credit bonds declined [42]. - The yields of secondary perpetual bonds also generally declined, with the yields of medium - and short - term varieties decreasing by about 4BP, and the spreads widening slightly by about 2BP [42]. - Last week, wealth management products had a net purchase of 7.7 billion yuan, and funds had a net purchase of 61.2 billion yuan. The scale of credit bond ETFs was 524.5 billion yuan, an increase of 1.8 billion yuan from the previous week [42]. Primary Issuance: Net Financing of General Credit Bonds Started to Increase, and Financial Bonds Maintained Net Repayment - From March 2 to March 6, 2026, the total issuance of corporate - type credit bonds was 100.2 billion yuan, a 220% increase from the previous week; the total issuance of financial - type credit bonds was 22.1 billion yuan, a more than 1000% increase from the previous week [2][68]. - The total net financing of corporate - type credit bonds was 40.3 billion yuan, a 134% increase from the previous week. Among them, the net financing of urban investment bonds was 4.4 billion yuan, and that of industrial bonds was 34.3 billion yuan [2][68]. - In terms of financial - type credit bonds, commercial bank bonds had a net repayment of 10.3 billion yuan, commercial bank sub - bonds had no net financing, and insurance and securities company bonds had a net financing of 3.5 billion yuan [2][68]. Secondary Trading: Medium - and Short - Duration Bonds Were Actively Traded, and the Trading of Long - Duration Bonds Increased Slightly - Active trading entities were mainly medium - and high - grade, medium - and short - term, and central and state - owned enterprises [77]. - For urban investment bonds, active trading entities were mainly divided into two types: mainstream high - grade platforms in economically strong provinces and core platforms in regions with relatively high spreads in large economic provinces [77]. - For real - estate bonds and private - enterprise bonds, active trading entities were mainly AAA - rated, with trading maturities mostly in the medium - and short - term [77]. - Among actively traded urban investment bonds, the proportion of bonds with a maturity of more than 5 years increased slightly from 2% to 3% compared with the previous week [77].

Group 1 - The net supply of ordinary credit bonds in the primary market decreased compared to the previous period, with no new issuances or maturities for perpetual bonds [3][6][12] - The total issuance and net financing of ordinary credit bonds for the period (2026.02.23-2026.03.01) were 952 billion yuan and -892 billion yuan, respectively, compared to 1390 billion yuan and 363 billion yuan in the previous period [3][6][12] - The issuance of industrial bonds decreased to 503 billion yuan, with net financing turning negative at -294 billion yuan, while local government bonds also saw a decline in issuance to 449 billion yuan, with net financing at -598 billion yuan [3][6][12] Group 2 - In the secondary market, yields generally increased, with credit spreads showing differentiation, where high-quality bonds outperformed perpetual bonds [3][6][12] - The yield on high-quality bonds mostly increased, while some lower-rated medium-term notes saw a decline in yield, with the 1Y AA- rated notes down by 4.7 basis points and 5Y AA rated notes down by 4.6 basis points [3][6][12] - The credit spreads for high-quality bonds narrowed, while most perpetual bonds experienced widening spreads, particularly the 7Y perpetual bonds which widened by 4.7, 4.6, and 3.7 basis points for AAA, AA+, and AA- rated bonds, respectively [3][6][12] Group 3 - The strategy suggests a cautious approach towards long-duration assets, focusing on short to medium-term credit bonds with higher certainty [3][6][12] - The demand for credit bonds is expected to be supported by stable but limited downward space in deposit rates, alongside expectations of wider credit and government bond supply pressures [3][6][12] - Investment opportunities include 2-year or shorter high-quality central state-owned enterprise real estate bonds, 3-year or shorter lower-rated local government bonds, and 3-5 year high-grade insurance subordinated bonds [3][6][12] Group 4 - The trading volume of credit bond ETFs is expected to stabilize around the Spring Festival, with potential demand for credit bond ETFs approaching the end of March, although to a lesser extent than the previous year [3][6][12] - The current credit spreads are at relatively low historical levels, indicating limited room for further compression, thus highlighting the importance of selecting bonds with good value [3][6][12] - For perpetual bonds, attention should be paid to the progress of approvals from the People's Bank of China in March and the potential for resuming issuances [3][6][12]

1. Report's Industry Investment Rating No information provided in the report. 2. Core Viewpoints of the Report - The ultra - long credit bond market ended its pre - holiday strong performance this week, facing pressure and a callback. The future trend of the ultra - long credit bond market depends on the tightness of the capital market, the change of risk appetite, and the stability of policy expectations during the Two Sessions [2][5]. 3. Summary of Each Section 3.1 Stock Market Characteristics - The yield of ultra - long credit bonds has undergone a callback. From February 24 to 27, 2026, the ultra - long credit bond market ended its pre - holiday strong performance and showed a pressured and callback trend. The number of outstanding ultra - long credit bonds with a yield of 2.5% - 2.6% increased to 152 compared with last week [2][13]. 3.2 Primary Issuance Situation - The supply of new ultra - long credit bonds is at a low level. In the past two weeks, the supply of new ultra - long credit bonds has remained low, with only the ultra - Great Wall Investment Bonds having incremental issuance. The interest rate of new ultra - Great Wall Investment Bonds fluctuated down to 2.57% in the latest week, and the subscription sentiment increased marginally. According to historical patterns, March to April will be the peak period for credit bond issuance, and attention can be paid to the selection space brought by the increased supply of long - term bonds [3][23]. 3.3 Secondary Transaction Performance - The price of ultra - long bonds fluctuated slightly. This week, the ultra - long credit bond market experienced a callback due to multiple pressures on the basis of the vulnerability accumulated in the previous extreme market. The full - price indices of ChinaBond AA + credit bonds with maturities of 7 - 10 years and over 10 years both declined by more than 0.06%, but the amplitude was generally smaller than that of government bonds and secondary capital bonds of the same maturity [4][31]. - The trading sentiment of ultra - long credit bonds remained weak. In the first week after the holiday, the trading activity of ultra - long credit bonds significantly declined. The number of transactions of general credit bonds with maturities over 7 years dropped to 226, and the number of transactions of the most active 7 - 10 - year industrial bonds fell to the bottom 30% in the past two years. Since the spread of ultra - long credit bonds has been compressed to a relatively low level (the spread between 7 - 10 - year industrial bonds and 20 - 30 - year government bonds is only 11bp), the price protection is insufficient, making the market extremely sensitive to marginal negative news and leading to a decline in trading activity after the holiday [4][33]. - The low - valuation transaction amplitude of ultra - long credit bonds significantly converged this week. The proportion of TKN (Take - No - Offer) in 7 - 10 - year general credit bonds dropped sharply from 83.8% before the holiday to 53.5%, indicating a significant decline in the market's willingness to chase long - term bonds [4][39]. - In terms of investor structure, the concentrated profit - taking of trading desks such as public funds was the direct cause of the callback of ultra - long credit bonds. The unexpected implementation of the "Shanghai Seven - Point" real - estate new policy and the increasing policy uncertainty before the Two Sessions suppressed their bullish sentiment. Insurance funds, traditionally the main investors in ultra - long bonds, did not show a strong willingness to take over during this adjustment [4][43]. - From a more microscopic perspective, the spread between active ultra - long credit bonds and government bonds of similar maturities widened this week. The net price of Chengtong Holdings' ultra - long bonds with maturities over 10 years basically returned to the level at the end of January [5][47].

1. Report Industry Investment Rating No relevant information provided. 2. Core View of the Report - Yields mostly increased, and credit spreads showed differentiation. General credit bonds (Pu Xin) performed better than Tier 2 and perpetual bonds. It is recommended to be cautious about long - term assets and focus on medium - and short - term credit bonds within 5 years [5]. 3. Summary by Directory 3.1 Primary Market - **General Credit Bonds**: The net supply of general credit bonds decreased compared to the previous period. The issuance of industrial bonds decreased to 503 billion yuan, and the net financing turned negative to - 294 billion yuan. The issuance of urban investment bonds decreased to 449 billion yuan, and the net financing turned negative to - 598 billion yuan. The weighted issuance term was 2.17 years, a decrease from the previous period [5][9]. - **Bank Tier 2 and Perpetual Bonds**: There was no new issuance or maturity of bank Tier 2 and perpetual bonds this period. This has been the case for 8 consecutive weeks this year [5][27]. 3.2 Secondary Market - **Yields**: Yields generally increased. Except for some low - quality medium - term notes, 3 - year non - public and perpetual bonds, most general credit bonds' yields increased. Tier 2 and perpetual bonds' yields increased across the board except for the 5 - year AA - perpetual bonds, with larger increases in the medium - and long - term [5][40]. - **Credit Spreads**: Credit spreads showed differentiation. General credit bonds' spreads mostly narrowed except for the 7 - year ones, and low - quality bonds within 5 years performed well. Tier 2 and perpetual bonds' spreads mostly widened except for the 1 - year and 10 - year ones [5][44]. - **Turnover Rate**: The turnover rates of general credit bonds and bank Tier 2 and perpetual bonds both decreased this week [55]. 3.3 Credit Strategy - Be cautious about long - term assets and focus on medium - and short - term credit bonds within 5 years. Consider the ticket - coupon value of some varieties and grade - sinking. Pay attention to investment opportunities in certain bonds such as real estate bonds of leading central and state - owned enterprises within 2 years, low - quality urban investment bonds within 3 years, medium - and high - grade perpetual or private general credit bonds around 3 years, and high - grade insurance sub - bonds from 3 - 5 years [5]. - For Tier 2 and perpetual bonds, pay attention to the approval progress of the People's Bank of China in March and the possibility of resuming issuance. In the short term, focus on the trading value of 6 - 7 - year Tier 2 and perpetual bonds [5]. 3.4 Urban Investment Bonds - Yields and credit spreads in different regions showed differentiation, with high - grade yields increasing and low - grade yields decreasing [58]. - The trading volume and turnover rate in different regions also showed different trends [63][65]. 3.5 Industrial Bonds - Yields and credit spreads in different industries showed differentiation, with low - grade bonds performing better than high - grade ones [66]. - The trading volume and turnover rate in different industries also showed different trends [70][73]. 3.6 Financial Bonds - Yields mostly increased, Tier 2 and perpetual bond spreads mostly widened, and the spreads of securities and insurance sub - bonds showed differentiation [74]. - The performance of yields, credit spreads, and excess spreads of bank Tier 2 and perpetual bonds, as well as securities and insurance sub - bonds in different regions and with different ratings, is presented in detail [93][105]. 3.7 Stock Bond Distribution - The current yields are mostly distributed within 2.4%. The average yield distributions of industrial bonds in different industries and urban investment bonds in different regions are provided, including different implicit ratings and remaining maturities [107][108][110].