Core Viewpoint - The second batch of science and technology bonds (Sci-Tech Bonds) supported by risk-sharing tools has been launched, indicating a shift from pilot programs to a more normalized expansion of policy support for private venture capital institutions [1][5]. Group 1: Upgraded Credit Enhancement Mechanism - The second batch of Sci-Tech Bonds features an upgraded credit enhancement mechanism that is more tool-oriented and collaborative, with three out of four issuing companies receiving credit enhancement from risk-sharing tools [3][4]. - The new credit enhancement model allows for a multi-party risk-sharing mechanism, which effectively lowers financing costs and extends financing cycles, addressing the high costs and short cycles previously faced by private venture capital institutions [3][4]. Group 2: Interest Rate and Market Response - The interest rates for private venture capital institutions' bonds have historically been high, often exceeding 6%, due to lower credit ratings stemming from unstable cash flows and market volatility [4]. - The first batch of Sci-Tech Bonds saw significant interest rate reductions, with rates as low as 1.85% for some institutions, demonstrating the effectiveness of the new credit enhancement model [4]. Group 3: Long-term Financing Solutions - The innovative design of the Sci-Tech Bonds addresses the "short fundraising, long investment" dilemma faced by VC institutions, allowing for bond terms that align with the long investment cycles of hard technology [6][7]. - For example, the upcoming issuance by Base Capital has a total term of 10 years, which matches the investment cycle of their managed funds [6]. Group 4: Increased Participation from Private Institutions - The successful issuance of the first batch of Sci-Tech Bonds has prompted more private venture capital institutions to plan their own bond issuances, indicating a growing trend in the market [9]. - The innovative credit enhancement model aims to support private venture capital institutions in alleviating long-standing fundraising challenges, thereby enhancing investor confidence in private equity funds [9]. Group 5: Investor Considerations - Institutional investors are increasingly attracted to Sci-Tech Bonds, but they remain cautious, focusing on the stability and repayment capacity of the issuing entities [10]. - The introduction of risk-sharing tools has significantly improved the credit ratings of these bonds, attracting conservative institutional investors who were previously hesitant due to perceived risks [10].