1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - The extremely low interest rate of the 25 Orient Fortune Sea PPN001 (Sci - tech Bond) is mainly due to the central - local cooperation risk - sharing mechanism. The report explores the risk - sharing mechanism of sci - tech bonds from the perspectives of risk - sharing tools and private enterprise bond issuance practices [2][6]. - The risk - sharing mechanism of sci - tech bonds, while continuing the toolbox of private enterprise bonds, has a fundamental shift in service objects, aiming to cultivate the long - term financing capabilities of hard - tech private enterprises and venture capital institutions. However, the current credit enhancement means and risk - sharing mechanisms are still imperfect [4]. - The evolution of China's private enterprise bond financing support tools shows a shift from policy - oriented to market - oriented operations, but the overall support for private enterprise bond financing has not been effective, with the net financing of private enterprise bonds being negative for a long time since 2018 [3][43][46]. 3. Summary by Relevant Catalogs 3.1 Credit Sharing Toolbox and Relevant Practices of Sci - tech Bonds - **Risk - sharing Modes**: There are two main risk - sharing modes: diversified sharing and mutual - cooperation sharing. The report focuses on the mutual - cooperation sharing mode, and risk - sharing tools mainly include guarantee credit enhancement, credit derivatives, central - local cooperation, and the establishment of risk - compensation funds [7]. - **Guarantee Credit Enhancement**: In the credit bond guarantee practice, the guaranteed subjects are mainly AA - rated state - owned enterprises, and the guarantee method is mainly joint - liability guarantee. China's financing guarantee system is government - led, but the actual guarantee coverage of market - oriented guarantee institutions for private enterprise bonds is low. Sci - tech bonds are tilted towards high - credit - grade state - owned enterprises, with an overall guarantee ratio of less than 5%, and the guarantee of private enterprise sci - tech bonds is even more difficult [8][13][14]. - **Transaction - type Credit Enhancement**: It is usually provided by credit enhancement companies. When the issuer defaults, the bondholder can transfer the bond to the credit enhancement company. Currently, the use of this method in the bond market is rare. As of July 15, 2025, only 3 outstanding credit bonds used this method, including 1 sci - tech bond [15]. - **Credit Derivatives**: The development of China's credit derivatives market is still in its early stage. There are 6 types of credit derivatives in total, including 4 in the inter - bank market and 2 in the exchange market. The development of credit derivatives has experienced several stages, and the issuance volume increased during the private enterprise and real - estate enterprise default tides. CRMW, as an example, shows characteristics such as commercial - bank - led creation, short - term creation, and low scale coverage in supporting sci - tech bonds. The supported subjects are mainly high - credit - grade private enterprises, and the industries are concentrated in basic chemicals, textile and apparel, and electronics [16][23]. - **Local Risk -缓释 Funds**: These are risk - compensation special funds arranged by local fiscal budgets. In the credit field, they mainly support small and medium - sized enterprises; in the bond field, they mainly serve to resolve urban investment debt risks. There is a lack of practical experience in supporting sci - tech bonds, although relevant policies encourage local governments to set up such funds [26][27][28]. - **Central - local Cooperation**: It is an innovative practice under the framework of the private enterprise bond financing support tool, with a double - layer credit - enhancement structure of "central + local". It has the advantages of risk dispersion and flexible and precise financing support. In supporting sci - tech bonds, in June 2025, 5 private equity investment institution sci - tech bonds were issued, mostly using the central - local cooperation mode, and the market recognition was high [29][35][36]. 3.2 Credit Risk - sharing Practices of Private Enterprise Bonds - **Evolution of Private Enterprise Bond Financing Support Tools**: It can be divided into three stages: the establishment stage (2018 - 2021), during which the private enterprise bond financing support tool was set up; the innovation stage (2022), when non - pure policy - oriented tools and the central - local cooperation new model were launched; and the stage of increasing support (2022 end - present), featuring a normalized central - local cooperation credit - enhancement mode [40][41][43]. - **Effect of Private Enterprise Bond Financing Support Tools**: Despite the continuous increase in support for private enterprise bond financing, due to successive default tides of private enterprises and real - estate enterprises, the support resources are mainly concentrated on high - credit - grade, medium - and large - sized private enterprises. The overall support effect is not significant, with the net financing of private enterprise bonds being negative for a long time since 2018 [43][46][48].