Report on Local Government Bond Supply and Trading Tracking 1. Investment Rating - Not provided in the report. 2. Core View - The report analyzes the supply and trading characteristics of local government bonds, including the issuance rhythm, pricing, and secondary - market trading performance, to help investors understand the current situation of the local government bond market [3][4]. 3. Summary by Directory 3.1 First - level Supply Rhythm - **Issuance Scale**: From September 15 - 19, 2025, local government bonds issued a total of 188.52 billion yuan, with new special bonds at 97.82 billion yuan and refinancing special bonds at 46.09 billion yuan. As of September 19, 2025, the issuance of special refinancing special bonds in September reached 52.8 billion yuan, accounting for 6.7% of the monthly local bond issuance scale [3][10]. - **Funding Allocation**: "Special new special bonds" and "ordinary/project revenue" are the main areas for special bond fund allocation [3][10]. - **Issuance Pricing**: The issuance interest rate of 30 - year local bonds reached a new high this year. The spreads between the issuance interest rates of 30 - year and 10 - year local bonds and the same - maturity treasury bonds widened to 20.8BP and 23.1BP respectively, while the issuance spread of 20 - year local bonds narrowed slightly to 20.6BP [3][16]. - **Regional Distribution**: In September, Guizhou, Guangdong, Henan and other regions were the main areas for local bond issuance. The issuance scale of local bonds over 20 years in Guangdong and Hunan reached 59.61 billion yuan and 30.25 billion yuan respectively. The number of regions with an average coupon rate higher than 2.3% increased, and the local government bonds in Hunan even rose above 2.4% [3][18]. 3.2 Second - level Trading Characteristics - **Anti - decline Ability**: Local government bonds over 10 years are more resistant to decline than the same - maturity treasury bonds and credit bonds. Last week, the indexes of 7 - 10 - year and over 10 - year local bonds fell by 0.07% and 0.28% respectively. The 7 - 10 - year variety performed worse than the same - maturity treasury bonds, while the over 10 - year variety had better anti - volatility ability than the same - maturity treasury bonds and credit bonds [4][23]. - **Trading Activity**: Government bonds in Guangdong, Hunan and other provinces were relatively actively traded, with the average trading term in both provinces above 26 years. The trading volume in Hunan and Guangxi increased month - on - month [4][23]. - **Trading Yield**: The average yield of local government bonds in mainstream regions is basically above 2%. The yields in regions with increased trading volume all exceed 2.25%, especially the local bonds in Guangxi, which reached 2.34% [4][23].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints The report conducts a comprehensive tracking and analysis of the supply and trading of local government bonds, covering aspects such as the overview of the stock market, the rhythm of primary supply, and the characteristics of secondary trading [11]. 3. Summary by Directory 3.1 Stock Market Overview - As of June 27, 2025, the local government bond stock scale reached 51.79 trillion yuan. New special bonds accounted for over 43% of the outstanding local bonds, and refinancing special bonds accounted for 21% [11]. - Among the special bonds with clear funding uses, the stock balances of shantytown renovation, park and new - area construction, and rural revitalization were 1.97 trillion, 1.57 trillion, and 1.12 trillion yuan respectively. The stock balance of toll roads exceeded 880 billion yuan, and that of water conservancy and ecological projects was over 200 billion yuan [11]. - As of June 27, 2025, Guangdong, Jiangsu, and Shandong ranked top three in local government bond stock scale, with 3.45 trillion, 3.28 trillion, and 3.1 trillion yuan respectively. Other GDP - large provinces like Sichuan, Zhejiang, Hunan, Henan, Hebei, Hubei, and Anhui also had a stock scale above 5 trillion [11]. 3.2 Primary Supply Rhythm - Last week, local government bonds worth 641.644 billion yuan were issued, including 422.296 billion yuan of new special bonds and 77.187 billion yuan of refinancing special bonds. "Ordinary/project income" and "repayment of local bonds" were the main investment areas for special bond funds [19]. - As of June 27, 2025, the issuance of special refinancing special bonds in June had reached 166.826 billion yuan, accounting for 14.19% of the monthly local bond issuance scale [19]. - In terms of the issuance term structure, the issuance proportion of local bonds within 7 years was relatively high last week, reaching 27.33%. The average coupon rates of local bonds for each major term were basically the same as those two weeks ago. The spread between the issuance rate of 30 - year local bonds and the same - term treasury bonds narrowed to 17.94BP, and that of 20 - year local bonds narrowed slightly to 14.46BP. The upper limit of the bid - rate for new bonds rebounded compared to two weeks ago, and the primary bidding sentiment remained sluggish [30]. - Last week, 8 provinces had new issuances. Shanghai had the largest new local bond issuance this month, amounting to 127.059 billion yuan, with terms mainly concentrated within 7 years and 7 - 10 years. Except for Hebei Province, where the terms were concentrated in 20 - 30Y, the terms of other provinces were mainly concentrated within 7 years and 7 - 10 years. Except for Tianjin, the average issuance rates of other provinces were below 2% [38]. 3.3 Secondary Trading Characteristics - As of June 27, 2025, the yield of 10 - year local bonds was 1.8%, and the spread with the same - term treasury bonds was 15.38BP, at the 30.2% quantile in the past 24 years. The price - difference quantiles of 15 - year and 30 - year varieties were 41.9% and 66.4% respectively [42]. - Last week, the turnover rates of local bonds for each major term increased slightly. The weekly turnover rate of bonds over 10 years was the highest, reaching 1.24%. In terms of regions, Shandong, Jiangsu, and Sichuan had a relatively large number of transactions, all exceeding 200. Zhejiang, Guangdong, and Fujian also had over 100 transactions. The average transaction term of local bonds last week was 16.6 years, and the average yield was 1.89% [46]. - In terms of the investor structure, commercial banks, insurance companies, securities proprietary departments, and broad - based funds were the most active institutions in local government bond trading. Insurance companies remained the main undertakers of local government bond supply, with a total net purchase of local government bonds reaching 313.96 billion yuan, of which the purchase proportion of bonds over 20 - 30 years reached 78.59% [48].