Credit Spread Performance - In May, the supply of credit bonds decreased, leading to a general decline in credit spreads, with lower-rated credit bonds experiencing a more significant narrowing [1] - The AAA-rated industrial bonds saw a uniform narrowing of credit spreads across all sectors, with the real estate sector showing the largest reduction of 18.98 basis points, while the financial holding sector had the smallest reduction of 2.36 basis points [8][9] - For private placement bonds, the pharmaceutical and biological sector had the largest narrowing of 17.18 basis points, while the environmental protection sector had the smallest at 0.99 basis points [8][9] City Investment Bonds - In May, credit spreads for city investment bonds across major ratings and maturities all declined, with the largest narrowing observed in Qinghai province for both public and private bonds [1] - The overall trend indicates that credit spreads for city investment bonds are moving downward across various regions and issuer levels [1] Financial Bonds - The credit spreads for bank perpetual bonds and other financial instruments generally narrowed, with most varieties experiencing a decrease, although some maturity spreads widened [1] - Securities companies' subordinated bonds and insurance companies' capital replenishment bonds saw a complete decline in credit spreads during the month [1] Historical Context - By the end of May, various types of credit bonds maintained historically low credit spreads, particularly for short-duration non-financial credit bonds and short-duration financial bonds, while medium to long-term financial bonds remained at relatively high historical percentiles [1][6]

Summary of Credit Bond Yield Trends in April Overall Credit Bond Performance - In April, credit bond yields exhibited a downward trend overall, with short-term spreads narrowing across the board. However, the decline in medium to long-term yields was less pronounced compared to the same maturity national development bonds, leading to a widening of credit spreads [5][9][11]. - By the end of April, short-term credit spreads remained at historically low levels, while medium to long-term financial bonds were at relatively high historical percentiles [5][11]. Industry-Specific Credit Spread Trends - **Industrial Bonds**: Most AAA-rated industrial bonds saw credit spreads widen in April. Among public bonds, the financial holding sector experienced the largest widening of 8.68 basis points, while the textile and apparel sector saw the most significant narrowing of 4.89 basis points. In private bonds, the basic chemical and retail sectors experienced slight narrowing, while other sectors generally widened by 3-10 basis points, with the steel sector widening the most at 10.86 basis points [13][15]. - **Local Government Bonds**: Credit spreads for local government bonds showed mixed trends, with lower-rated bonds generally narrowing while higher-rated bonds widened. Regions with relatively high spreads, such as Guizhou and Qinghai, mostly saw narrowing, while lower spread regions like Beijing and Shanghai experienced widening [5][9]. - **Financial Bonds**: The credit spreads for bank perpetual bonds mostly narrowed, while the spreads for securities company subordinated bonds and insurance company capital replenishment bonds widened across the board [5][9]. Historical Context - The credit spreads for various types of bonds remained at historically low levels, with AA-rated public and private industrial bonds reaching 30%-50% of their historical percentiles. Financial bonds generally had higher spread levels, exceeding the 30% historical percentile [11][12]. Key Industry Observations - In April, the steel and coal industries saw credit spreads widen across the board, with changes not exceeding 7 basis points. The high-grade bonds in these sectors experienced more significant widening. The electricity and construction engineering sectors also saw most spreads widen [15][16].