Group 1 - The report highlights that ultra-long credit bonds are leading the market, with credit bond yields following the downward trend of interest rate bonds, although the overall market is still experiencing a compression of credit spreads [1][9] - Short-term credit bonds around 1 year are closely following interest rate trends, with limited room for further compression due to previously extreme spread reductions [1][9] - The performance of ultra-long credit bonds has been particularly strong, transitioning from mid-high grade industrial bonds to urban investment bonds, indicating a robust market sentiment [1][9] Group 2 - As of June 22, 2025, the issuance scale of ultra-long credit bonds has reached 587.8 billion yuan this year, significantly higher than the same period last year, indicating a recovery in supply [2][16] - The report notes that the liquidity of ultra-long credit bonds has improved, driven by increased supply and a more diverse participation from various market entities [4][35] - The report emphasizes that for institutions with stable liabilities, ultra-long credit bonds still offer attractive coupon advantages, making them more appealing than interest rate products [5][15] Group 3 - The report discusses the performance of ultra-long credit bonds during different market conditions, noting that they tend to outperform shorter-term bonds during periods of declining yields due to thicker coupons and longer durations [24][25] - Conversely, during market downturns, ultra-long credit bonds can experience greater capital losses due to their lower liquidity and duration effects, which can lead to negative returns if coupon income is insufficient to cover losses [26][29] - The report indicates that as of June 20, 2025, the total outstanding credit bonds with maturities over 5 years is approximately 2 trillion yuan, accounting for 6.7% of the total credit bond market [20][22]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - The yield of ultra-long credit bonds continues to decline, and the number of outstanding ultra-long credit bonds with a yield below 2.2% has increased to 261 compared to last week [2][13]. - The subscription enthusiasm for ultra-long credit bonds has reached a high level. The supply of new ultra-long credit bonds in the first week after the holiday was still slow, with a weekly issuance volume of less than 9 billion. The average issuance rate of ultra-long industrial bonds has decreased marginally to 2.35%, while the average coupon rate of ultra-long urban investment bonds has continued to rise to 2.78% [3][21]. - The growth of the ultra-long credit bond index is weak. After the holiday, the ultra-long credit bond index had a slight catch-up increase, but the growth was still conservative, with the weekly increase of AA+ credit bonds over 10 years being only 0.37%. The scenario of rushing to buy ultra-long credit bonds is unlikely to occur, and the willingness of the market to extend the duration of credit bonds is weak [4][30]. Summary by Directory 1. Stock Market Characteristics - The yield of ultra-long credit bonds continues to decline. Due to the early implementation of interest rate cuts and reserve requirement ratio cuts, long-term interest rates have rapidly declined to a low level, further pushing down the yield of ultra-long credit bonds. The number of outstanding ultra-long credit bonds with a yield below 2.2% has increased to 261 compared to last week [2][13]. 2. Primary Issuance Situation - The subscription enthusiasm for ultra-long credit bonds has reached a high level. The supply of new ultra-long credit bonds in the first week after the holiday was still slow, with a weekly issuance volume of less than 9 billion. The average issuance rate of ultra-long industrial bonds has decreased marginally to 2.35%, while the average coupon rate of ultra-long urban investment bonds has continued to rise to 2.78%. Driven by loose expectations and the low new issuance scale this week, the subscription enthusiasm for new ultra-long credit bonds has risen to a high level of over 70% since 2024 [3][21]. 3. Secondary Trading Performance - The growth of the ultra-long credit bond index is weak. After the holiday, the ultra-long credit bond index had a slight catch-up increase, but the growth was still conservative, with the weekly increase of AA+ credit bonds over 10 years being only 0.37% [30]. - The scenario of rushing to buy ultra-long credit bonds is unlikely to occur. As the yields of government bonds over 10 years and medium- and short-term coupon assets approach the lowest levels of the year, investors should theoretically shift part of their bond allocation focus to long-term credit bonds. However, judging from the trend of trading volume, the willingness of the market to extend the duration of credit bonds is weak. Although the weekly trading volume of ultra-long industrial bonds in the mainstream 7 - 10-year maturity has increased, the figure is still lower than that in late March, and the trading sentiment is not sufficient to support the ultra-long bond market [4][33]. - The proportion of new ultra-long credit bond trading in May has continued to rise compared to the previous period, with the figure exceeding 40% in the latest week. The low valuation deviation of ultra-long credit bonds in the latest week is also relatively conservative, and the increase in holdings is restricted by the low spread protection. The proportion of TKN transactions in ultra-long credit bonds this week has also dropped below 70% [4][37]. - In terms of investor structure, public funds have increased their holdings of 5 - 10-year credit bonds by more than 2.4 billion in a single week, and wealth management products have also increased their allocation of general long-term bonds within 10 years. However, insurance companies did not show any buying volume for ultra-long credit bonds this week, possibly shifting some positions to chase equity assets [4][40].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints - The yield of ultra - long credit bonds unexpectedly declined, and the sentiment for subscribing to new ultra - long credit bonds warmed up, but the index increase of ultra - long credit bonds was difficult to match that of treasury bonds, and the spread of ultra - long credit bonds widened passively, showing the problems of slow growth and low cost - effectiveness [2][3][4][5] 3. Summary by Directory 3.1存量市场特征 - The yield of ultra - long credit bonds unexpectedly declined. Factors such as the loosening of the capital market at the cross - month node and continuous trade frictions strengthened the bullish logic of the bond market. Before the holiday, the yield of long - duration interest - rate bonds dropped rapidly, and the interest rate of ultra - long credit bonds also declined. More than a hundred existing ultra - long credit bonds had yields below 2.2% compared with the previous week [2][13] 3.2一级发行情况 - The sentiment for subscribing to ultra - long credit bonds warmed up. Before the holiday, the supply of new ultra - long credit bonds slowed down. However, the average issuance interest rate of ultra - long industrial bonds rebounded to 2.39%. Benefiting from the increase in the coupon yield of new bonds and the loosening of the capital market, the subscription sentiment for new ultra - long credit bonds showed signs of marginal warming [3][22] 3.3二级成交表现 - The index increase of ultra - long credit bonds was difficult to match that of treasury bonds. Treasury bonds over 10 years strengthened rapidly. Although the ultra - long credit bond index followed the increase, the increase was far less than that of interest - rate bonds. The weekly increase of AA + credit bonds over 10 years was only 0.21% [4][29] - The trading volume of ultra - long credit bonds suddenly increased. Within three trading days of the week before the holiday, the number of transactions of credit bonds over 7 years exceeded the readings of the previous two weeks, with the most obvious increase in the trading volume of 7 - 10 - year long - term bonds. The sudden increase in trading volume may be related to some investors missing the interest - rate market and then increasing their allocation of ultra - long credit bonds to make up for losses. Since April, the proportion of transactions of new ultra - long credit bonds has increased significantly, and the reading in the latest week was close to 30% [4][30] - In the latest week, the proportion of TKN transactions of ultra - long credit bonds rose to over 75%, and the overall trading form was mainly low - valuation transactions [4] - Before the holiday, both public funds and wealth management products had positive net purchases of ultra - long credit bonds. In particular, the scale of wealth management products' increase in holdings of long - term credit bonds over 5 years reached a two - year high, with a weekly net purchase scale of 1.75 billion, exceeding that of insurance, a stable buyer [4][38] - From a more microscopic perspective, the spread of ultra - long credit bonds widened passively. The credit spreads of active bonds around 10 years and 30 years both exceeded 60bp, rising to over 80% of the quantile level in the past 24 years. Although the net price of active ultra - long credit bonds also increased in the latest week, the increase was significantly weaker than that of interest - rate bonds of the same term. The floating profits of long - term bond issuers below 20 years were not much different from those of medium - term issuers, exposing the problems of "slow growth and low cost - effectiveness" of this variety [5][43]

1. Core Viewpoint - Amid intensified equity market volatility and tariff disturbances, the bond market has strengthened. The yield center of existing ultra - long credit bonds has shifted down, with increased issuance and trading activity. However, due to the stronger performance of same - maturity interest - rate bonds, the credit spread of ultra - long credit bonds has widened, and trading timing should be emphasized [2][3][4][5] 2. Breakdown by Catalog 2.1 Stock Market Characteristics - The yield center of existing ultra - long credit bonds has significantly shifted down. Amid intensified equity market volatility and tariff disturbances, the bond market has strengthened, weakening the cost - effectiveness of medium - and short - duration coupon assets. Investors who missed the previous interest - rate market and seek excess returns are starting to go long on ultra - long credit bonds [2][12][13] 2.2 Primary Issuance Situation - The proportion of long - bond issuance has significantly increased. The average coupon rate of recent ultra - long credit new bonds has significantly declined compared to mid - March. Some bond - issuing entities are seizing the opportunity of low issuance costs to issue long - term bonds, leading to a surge in issuance at the end of March. In early April, the new issuance scale of ultra - long credit bonds decreased due to holiday factors, but its proportion in the total issuance scale of credit bonds remained at a high level. Investor sentiment towards subscribing to ultra - long credit new bonds has also shown signs of warming [3][21] 2.3 Secondary Trading Performance - The index of ultra - long credit bonds has shown a notable increase. In the past two weeks, the index of government bonds with a maturity of over 10 years has continuously led the gains, and the index of long - duration credit bonds has also risen strongly. The weekly decline of AA+ credit bonds with a maturity of over 10 years reached 0.86%, making it the highest - rising coupon asset [31] - The trading activity of long - term bonds has improved. Since late March, the number of trading transactions of ultra - long credit bonds has significantly increased, with the weekly trading volume of industrial long - term bonds with a maturity of over 10 years once exceeding 80 transactions. However, in the latest week, the trading enthusiasm of ultra - long credit bonds with a maturity of 7 - 10 years remained high, while the number of trading transactions of bonds with a maturity of over 10 years decreased significantly, indicating that investors still have concerns about the uncontrollable drawdown and liquidity flaws of ultra - long credit bonds [34] - The deviation of ultra - long credit bond trading from the valuation range has further widened, and the bullish sentiment towards 7 - 10 - year credit bonds has become intense, with the TKN trading proportion of this variety reaching 83.9%, a historical high of 93.7% in the past 24 years [38] - In terms of investor structure, insurance companies' preference for long - bond allocation has remained stable. Due to scale growth and liability - side cost constraints, wealth management products have also increased their holdings of ultra - long credit bonds recently. In addition, for the purpose of chasing the upward trend and making up for missing the interest - rate market, public funds have continuously bought long - duration credit bonds with a maturity of 5 - 10 years for two consecutive weeks, and the net purchase scale once exceeded that of other product categories and insurance companies [41] 2.4 Credit Spread and Trading Considerations - Although the yield of ultra - long credit bonds has also declined, the credit spread of ultra - long credit bonds has widened from a spread perspective because the same - maturity interest - rate bonds have risen more sharply. In the latest week, the spread of actively traded ultra - long credit bonds with a maturity of over 10 years has widened to around the 70th percentile in the past 24 years. Ultra - long credit bonds have accumulated significant floating profits in April, but due to the overall weak liquidity of the variety, trading timing should be emphasized [5][46]