1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - In 2025, the urban investment bond market continued to tighten. The domestic issuance scale declined for two consecutive years after peaking in 2023, and the net financing turned negative for the first time. The overseas financing policy moved closer to the domestic one, and the urban investment bond market entered the stock era. The reduction in non - key provinces was particularly obvious [3][13]. - In 2026, it is the last year of this round of local debt replacement. The refinancing environment of urban investment enterprises is expected to remain tight. The issuance scale of urban investment bonds is about 4.6 trillion, and the net outflow may exceed 100 billion. The debt repayment pressure of key regions such as Yunnan, Guangxi, and Tianjin remains high [6][13][60]. - In the future, attention should be paid to the liquidity pressure of urban investment enterprises under the countdown of "exiting the platform", the progress and efficiency of asset revitalization, the negative impact of government arrears, and the transformation quality of urban investment enterprises [8][9][10][11]. 3. Summary by Relevant Catalogs 2025 Urban Investment Bond Features - **Issuance scale continued to decline, and net financing of domestic and overseas urban investment bonds turned negative**: The domestic issuance scale of urban investment bonds was 5.30 trillion yuan, a year - on - year decrease of 13.48%. The net financing scale was - 1574.69 billion yuan. Only provincial and AAA - rated urban investment entities had positive net financing. The overseas issuance scale decreased by 17.89% year - on - year, and the net financing scale turned from positive to negative, reaching - 2905 million yuan [4][17][21]. - **The proportion of debt rollover increased, and the level of financing subjects for new - type urban investment bonds rose**: The broad - sense debt rollover ratio of domestic bonds reached 98.58%, and the narrow - sense ratio reached 93.40%. The overseas broad - sense debt rollover ratio increased by 16.27 percentage points to 67.99%. The financing subjects for new - type urban investment domestic bonds were mainly provincial and AAA - rated entities [33]. - **Net financing in non - key provinces declined significantly, and credit spreads in each province generally narrowed**: Both key and non - key regions had net outflows of urban investment bonds, with non - key regions having a deeper net outflow. 13 provinces had a 100% debt rollover ratio. The credit spreads of 31 provinces narrowed, but regional risk differences still existed [39][40]. - **"Exiting the platform" and transformation accelerated, and the progress in the eastern and central regions was faster**: The number of restructuring and integration events of urban investment enterprises increased year by year. More enterprises declared to become market - oriented business entities or exit the financing platform list, especially in the eastern and central regions. Some entities achieved their first bond issuance after "exiting the platform" [48]. - **Credit risk events in key provinces decreased, and economic provinces faced relatively large debt pressure**: The number of non - standard defaults and commercial bill overdue events of urban investment enterprises decreased. However, the credit risk of urban investment enterprises spread from weak to strong regions and from low - level to high - level entities. Economic provinces such as Shandong, Jiangsu, and Henan faced relatively large debt pressure [53][55]. 2026 Issuance Forecast - **Maturity and put - back pressure remains high**: The maturity scale of urban investment bonds in 2026 is about 3.47 trillion yuan, and the put - back scale is about 840 billion yuan, with a total of 4.31 trillion yuan. Key regions such as Yunnan, Guangxi, and Tianjin face relatively large debt roll - over pressure [60]. - **Early redemption scale and proportion remain at a certain level**: In 2025, 1369 urban investment bonds were redeemed early, with a total scale of 241.655 billion yuan. The early redemption scale of key provinces accounted for 13.54% of the total maturity scale, much higher than 3.26% in non - key provinces [64]. - **Issuance scale is expected to be about 4.6 trillion, and net outflow may exceed 100 billion**: The refinancing environment of urban investment enterprises will remain tight. The issuance scale is expected to be between 4.5 and 4.6 trillion yuan, and the net outflow trend is difficult to reverse. The proportion of debt rollover will remain high, and the level of financing subjects for new - type urban investment bonds may continue to rise [6][67][68]. Follow - up Concerns and Investment Strategies - **Follow - up concerns**: Pay attention to the liquidity pressure of urban investment enterprises under the countdown of "exiting the platform", the progress and efficiency of asset revitalization, the negative impact of government arrears, and the transformation quality of urban investment enterprises [73][74][76][77]. - **Investment strategies**: In 2026, urban investment bonds still have certain allocation value. Investors can explore short - duration urban investment bonds of medium - and low - grade in regions where debt - resolution policies are well - implemented. In 2027, June may be a critical differentiation point for urban investment enterprises. Investors should be vigilant against the credit risk of weak entities after the withdrawal of debt - resolution policies [80].

Report Summary 1. Report Industry Investment Rating The provided content does not mention the industry investment rating. 2. Core Viewpoints of the Report - The debt resolution process is deepening, and the exit of urban investment platforms is accelerating. As of October 30, 2025, 1993.409 billion yuan of special bonds for implicit debt replacement have been issued, and special new - added special bonds have exceeded 1.2 trillion yuan in 2025, far exceeding the 877.776 billion yuan in 2024. More than 60% of financing platforms have exited by the end of June 2025 [5][12]. - In the short term, the capital vitality of urban investment is significantly affected by debt resolution, and there is no obvious change with the progress of platform exit. Urban investment bonds continue the net outflow trend and the scale is expanding, mainly due to the significant reduction in weak regions and low - rated entities [5][36]. - In the primary market, new bond issuance of urban investment entities is still blocked after exiting the platform, and the use of raised funds is mainly for debt replacement, with a quarterly proportion of over 70%. Both key and non - key provinces are affected by debt resolution, and the expansion willingness is low [5][26][36]. - In the secondary market, early redemption of urban investment bonds further affects the net supply. From Q1 - Q3 2025, the early redemption scale increased by 7.5 billion yuan compared with the same period in 2024, and the tender offer acquisition increased by 8.1 billion yuan. There are opportunities for early redemption games [6][26][36]. 3. Summary According to the Directory 3.1. Debt Resolution and Platform Exit Progress - As of October 30, 2025, 1993.409 billion yuan of special bonds for implicit debt replacement have been issued, and except for Henan Province, other regions have completed the issuance within the year. The remaining quota will be used in advance. The issuance of special new - added special bonds has exceeded 1.2 trillion yuan in 2025, far exceeding 877.776 billion yuan in 2024. Non - key debt - resolution regions such as Jiangsu, Guangdong, Hebei, and Hunan have relatively large issuance amounts, and Guangdong, Yunnan, Hebei, and Jiangsu have significant year - on - year increases [5][12]. - By the end of June 2025, more than 60% of financing platforms have exited, indicating a relatively smooth exit process within the policy framework [5][12]. 3.2. Urban Investment Bond Financing Situation - As of October 30, 2025, the net outflow of urban investment bonds is 200.3 billion yuan, with a year - on - year increase of 74.4 billion yuan. Shandong and Guangdong are the main net inflow regions, while Jiangsu, Hunan, Chongqing, and Guizhou have large net outflow scales [18]. - By administrative level, the net outflow is mainly concentrated in district - county and national - level park entities, and the net outflow scale is still expanding year - on - year. The municipal entities have changed from net inflow to net outflow, while the provincial entities have little change [19]. - By rating, the net outflow is mainly concentrated in AA and AA+ entities. The AA entities continue the large - scale net outflow in the same period of 2024, and the AA+ entities have changed from net inflow to net outflow [20]. 3.3. Reasons for the Increase in Net Outflow of Urban Investment Bonds - Primary market: New bond issuance of urban investment entities is still blocked after exiting the platform. The use of raised funds is mainly for debt replacement, with a quarterly proportion of over 70% and a slight increase compared with 2024. Most provinces, especially key provinces, mainly use bond issuance for debt replacement. Non - key provinces are also affected by debt resolution, and the expansion willingness is low [26]. - Secondary market: Early redemption of urban investment bonds further affects the net supply. From Q1 - Q3 2025, the early redemption scale increased by 7.5 billion yuan compared with the same period in 2024, and the tender offer acquisition increased by 8.1 billion yuan. The proportion of urban investment bonds redeemed at face value in Q1 - Q3 2025 is significantly lower than that in the same period of 2024, and there are opportunities for early redemption games [6][26][27]. 3.4. Summary - In the short term, the capital vitality of urban investment is significantly affected by debt resolution, and there is no obvious change with the progress of platform exit. Urban investment bonds continue the net outflow trend and the scale is expanding, mainly due to the significant reduction in weak regions and low - rated entities [36]. - In the primary market, new bond issuance is still blocked, and the use of raised funds is mainly for debt replacement. In the secondary market, early redemption affects the net supply, and there are opportunities for early redemption games [36].

Key Points - The urban investment bond market in the first half of 2025 experienced a significant decline, with issuance reaching 2.77 trillion yuan, a year-on-year decrease of 12.15%, marking a three-year low. The net financing was negative at -1200.04 billion yuan, with four consecutive months of net outflow from March to June, the longest duration in history and the earliest occurrence within the year [1][22][37] - The overall issuance interest rate decreased to 2.40%, down 0.41 percentage points year-on-year. However, the decline in interest rates for lower-rated urban investment bonds was minimal, with AA- rated bonds even experiencing an increase [6][30] - The average maturity of issued bonds extended to 3.89 years, reflecting a trend towards longer-term financing. The broad and narrow definitions of refinancing ratios reached 97.57% and 94.13%, respectively, indicating a high reliance on refinancing [6][35] - Trading volume in the urban investment bond market decreased by nearly 15% year-on-year, with trading spreads compressing compared to the end of 2024 [40] - Both key and non-key regions experienced net outflows, with non-key regions showing a deeper level of outflow. In 13 provinces, the refinancing ratio reached 100%, with 10 of these being key provinces [7][43] - Credit risk in the urban investment sector showed slight improvement, with fewer default events reported. However, the overall credit quality remains a concern, as evidenced by the downgrades in certain provinces [8][11] - For the second half of 2025, the expected issuance scale is projected to be between 2.34 trillion and 2.50 trillion yuan, with a potential for continued negative net financing in certain months. The refinancing ratio is anticipated to remain high, and the hierarchy of financing entities may continue to rise [9][10] - The urban investment sector is facing significant challenges, including high debt pressures and the need for effective policy optimization to support financing cycles and economic development. The ongoing transformation of urban investment entities is critical, with a focus on balancing debt resolution and business expansion [10][11][12]