Report Summary 1. Core View The report focuses on the supply and trading situation of local government bonds, analyzing the issuance rhythm, pricing, and secondary - market trading characteristics of local government bonds [3][4]. 2. Summary by Directory 2.1 Primary Supply Rhythm - From January 5 - 9, 2026, local government bonds worth 117.66 billion yuan were issued, including 87.43 billion yuan of new special bonds and 29.23 billion yuan of refinancing special bonds. The main investment areas of special bond funds are "ordinary/project income" and "replacing implicit debts" [3][10]. - As of January 9, 2026, the issuance of special refinancing bonds in January totaled 132.14 billion yuan, accounting for 46.3% of the monthly local bond issuance scale [3][10]. - The average issuance interest rate of 10 - year local bonds in the latest week was 2.03%, slightly down from the previous week. The coupon average of new 20 - year and 30 - year local bonds was above 2.47%, with the 30 - year long - term bond coupon reaching a 25 - year high. The spread of ultra - long local bonds narrowed marginally, and the spread average of bonds with a term of over 10 years was mostly between 15 - 20bp [3][16]. - In the first week after the new year, local bond issuance was concentrated. Only Shandong and Zhejiang had new bond issuances in January, and the average coupon rates of local government bonds in these regions were above 2.3% [3][16]. 2.2 Secondary Trading Characteristics - The prices of ultra - long local bonds fell significantly. Last week, the weekly declines of 7 - 10 - year and over 10 - year local bond indexes were 0.07% and 0.42% respectively, between those of the same - term treasury bonds and ultra - long credit bonds [4][17]. - The trading volume of Shandong local bonds increased significantly last week, with the weekly trading volume rising from about a hundred before the new year to 201. The trading of local bonds in Sichuan and Jiangsu was also relatively active [4][17]. - In terms of trading returns, the returns of over 20 - year long - term bonds in Shandong and Henan could reach 2.3%, while the average returns of government bonds in other regions were mostly between 1.8% and 2.3% [4][17].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints The report comprehensively tracks the supply and trading of local government bonds, including an overview of the stock market, the rhythm of primary supply, and the characteristics of secondary trading, presenting a detailed picture of the local government bond market in the current period [11]. 3. Summary by Directory 3.1 Stock Market Overview - As of May 9, 2025, the local government bond stock reached 50.72 trillion yuan, indicating a continuous expansion of the market [11]. - Among the outstanding local bonds, the proportion of new special-purpose bonds exceeded 43%, and the proportion of refinancing special-purpose bonds was 21% [11]. - In terms of the investment direction of special-purpose bonds, shantytown renovation, park and new district construction, and rural revitalization were the areas with relatively large scales, with stock balances all exceeding 1 trillion yuan. The stock balance of toll roads exceeded 870 billion yuan, and the stock balance of water conservancy and ecological projects also exceeded 200 billion yuan [11]. - As of May 9, 2025, Guangdong, Jiangsu, and Shandong ranked among the top three in terms of local government bond stock, with each province's stock exceeding 3 trillion yuan. Other major GDP - provinces such as Sichuan, Zhejiang, Hunan, Henan, Hebei, and Hubei also had stock scales above 2 trillion yuan [11]. 3.2 Primary Supply Rhythm - Last week, local government bonds worth 105.459 billion yuan were issued, including 100.556 billion yuan of new special - purpose bonds and 367 million yuan of refinancing special - purpose bonds. "Ordinary/project revenue" and "repayment of local bonds" were the main investment areas for special - purpose bond funds [18]. - As of May 14, 2025, the issuance of special refinancing special - purpose bonds in May had reached 12.695 billion yuan, accounting for 2.81% of the monthly local government bond issuance scale [18]. - In terms of the issuance term structure, the issuance proportion of 10 - 20 - year local government bonds was relatively high last week, reaching 35.42%. The average coupon rates of local government bonds for each major term were basically the same as those two weeks ago. The spread between the issuance rate of 30 - year local government bonds and the same - term treasury bonds slightly widened to 21.49BP, and the spread of 20 - year local government bonds over the same - term treasury bonds slightly widened to 15.34BP [27]. - From the perspective of new bond subscription, the upper limit of the bid rate last week was slightly higher than that two weeks ago, and the primary tender sentiment significantly recovered [27]. - Five provinces issued new bonds last week. Fujian had the largest issuance volume this month, with terms mainly concentrated within 7 years and 10 - 20 years. Guangdong followed, with terms mainly concentrated in 7 - 10 years and 10 - 20 years. Jiangxi, Inner Mongolia, and Dalian had relatively small new issuance amounts. Except for Inner Mongolia, the issuance rates of other provinces were below 2% [35]. 3.3 Secondary Trading Characteristics - Since mid - to late March this year, the yield of local government bonds has been on a continuous downward trend. As of May 9, 2025, the yield of 10 - year local government bonds was 1.86%, with a spread of 22.49BP from the same - term treasury bonds, at the 72.6% quantile since 2024. The quantiles of the price spreads for the 15 - year and 30 - year varieties were 90% and 88.2% respectively [36]. - Last week, the turnover rate of local government bonds rebounded. The turnover rates of all term varieties significantly increased compared to two weeks ago. The variety with the highest weekly turnover rate was the one within 7 years, with a reading of 0.62% [42]. - In terms of regions, the number of transactions in Jiangsu and Shandong last week exceeded 100. The average transaction term of local government bonds last week was 15.73 years, and the average yield was 1.92% [42]. - 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 20.906 billion yuan, of which the purchase proportion of 20 - 30 - year and above varieties reached 81.78%. Funds had a net purchase of 527.7 million yuan last week, mainly in the 10 - 20 - year varieties. Wealth management products had a net purchase of 72.7 million yuan, a decline compared to two weeks ago [5].