Core Insights - The offshore bond market for Chinese entities showed stable issuance in the primary market and strong performance in the secondary market during the third quarter of 2025 [1][2] Primary Market Performance - In Q3 2025, the total issuance of offshore bonds reached $774 billion, with a net financing of $45.77 billion, a significant recovery from the previous quarter's -$314.82 billion [2] - Excluding real estate sector defaults, the actual new issuance was $639 billion from 502 bonds [2] - The issuance of local government bonds totaled 96 bonds amounting to $143 billion, while financial bonds accounted for 285 bonds totaling $165 billion [2] - The real estate sector saw a continued decline in new financing, with only 8 bonds issued for a total of approximately $10 billion [2] - The issuance included 106 offshore RMB bonds, 282 USD bonds, 87 HKD bonds, 22 EUR bonds, and 5 bonds in other currencies [2] Issuance Methods - The majority of bonds were directly issued, totaling 319, while 82 were guaranteed issues [3] - The trend indicates a diversification in the types of issuers entering the offshore bond market [3] Secondary Market Performance - By the end of Q3 2025, the Markit iBoxx Asian USD bond index for Chinese entities showed an increase, with the investment-grade index rising by 0.55% [4][6] - The real estate bond index increased by 0.56%, while the local government bond index rose by 0.50% [6] Debt Repayment Pressure - The overall repayment pressure for offshore bonds is expected to ease in Q4 2025, with total repayments decreasing by $130.53 billion compared to Q3 [7] - The repayment amounts for October, November, and December are projected at $91.81 billion, $117.72 billion, and $151.37 billion, respectively [7] Market Outlook - The restructuring of debts by several real estate companies has led to a decline in credit risk premiums, resulting in a narrowing of yield spreads for investment-grade and high-yield USD bonds [9] - The expansion of the "Southbound Trading" program is anticipated to enhance the market capacity and liquidity of Chinese offshore bonds [9]