Core Viewpoint - The reform of the Jilin rural credit system is making significant progress, with the establishment of the Jilin Rural Commercial Bank expected to enhance its operational strength and support sustainable business development, ultimately reaching a capital of 40 billion yuan [2][5][10]. Group 1: Reform and Financial Support - The Jilin provincial government has issued 260 billion yuan in special bonds to support the development of small and medium-sized banks, with a total of 346 billion yuan allocated for the reform of the Jilin rural credit system [2][5]. - The Jilin Financial Holding Group is investing in the newly established Jilin Rural Commercial Bank to improve its capital adequacy and risk resistance [5][6]. - The special bonds have a 10-year term and an interest rate of 1.76%, marking the first issuance of such bonds in 2025 [6][7]. Group 2: Financial Performance and Market Position - As of the end of December 2023, the total assets of the Jilin rural credit system reached 1,007.24 billion yuan, with total liabilities of 953.59 billion yuan, reflecting increases of 53.77 billion yuan and 57.57 billion yuan respectively [10]. - The balance of various deposits was 790.31 billion yuan, up by 59.76 billion yuan, representing an 8.2% growth, while the balance of loans was 497.29 billion yuan, increasing by 17.45 billion yuan, or 3.6% [10]. - The market shares for deposits and loans in the Jilin rural credit system are 23.3% and 22.3%, respectively, making it the largest in the province [10]. Group 3: National Context and Future Outlook - If the reform proceeds smoothly, the Jilin Rural Commercial Bank may become the tenth provincial-level rural commercial bank established in the country [12]. - The reform model chosen by Jilin is the "unified legal person" model, which aims to consolidate operations and enhance risk management [12][14]. - Other provinces are also advancing their rural credit system reforms, with various models being implemented across the country [11][14].

Core Viewpoint - The issuance of special bonds to support small and medium-sized banks in Jilin Province marks a significant step in addressing capital shortages and enhancing risk resilience in the banking sector [1][2]. Group 1: Issuance Details - Jilin Province's Finance Department completed the public tender for the first tranche of special bonds for small and medium-sized banks, amounting to 26 billion yuan, with a 10-year maturity and a coupon rate of 1.76% [1]. - The total issuance of special bonds for small and medium-sized banks has reached 508 billion yuan nationwide, with the peak issuance period from 2021 to 2023 accounting for 87% of the total [2]. Group 2: Purpose and Background - The special bonds aim to alleviate the capital constraints and risk accumulation faced by small and medium-sized banks, which struggle to raise capital through market mechanisms [2][3]. - The issuance of these bonds began in 2020, with a total of 550 billion yuan allocated for capital supplementation of small and medium-sized banks from 2020 to 2022 [1]. Group 3: Future Trends - The issuance of special bonds is expected to slow down in 2024, as regulatory bodies encourage small and medium-sized banks to enhance their capital-raising capabilities through market reforms [3][4]. - The role of special bonds is shifting from a primary tool for capital supplementation to a more auxiliary function, serving as a safety net rather than a regular funding source [3][4].

Report Investment Rating No investment rating information is provided in the report. Core Viewpoints - The Central Urban Work Conference points out a new direction for urban development. Special bond support areas may be further tilted towards urban renewal, green - low - carbon, safety - resilience, and smart governance. Urban investment enterprises can participate in urban renewal and smart city operations to accelerate market - oriented transformation [7][9]. - Jilin plans to issue 26 billion yuan of special bonds for small and medium - sized banks to support the establishment of a provincial rural commercial bank. In the future, more provinces may issue relevant bonds to support small and medium - sized banks and explore the feasibility of supporting other local small and medium - sized financial institutions [11]. - This week, the issuance and net financing of local government bonds and urban investment bonds both increased, with different trends in issuance costs and structures [16][20]. Summary by Directory 1. News Review - **Central Urban Work Conference**: Held from July 14th to 15th, it emphasizes "five transformations" and "seven key tasks". Special bond support areas may be tilted towards urban renewal, etc., and urban investment enterprises can accelerate transformation [7][8][9]. - **Jilin's Special Bond Issuance**: Jilin plans to issue 26 billion yuan of special bonds for small and medium - sized banks on July 22nd. More provinces may follow suit to support small and medium - sized banks and explore supporting other local small and medium - sized financial institutions [11][12]. - **Early Redemption of Urban Investment Bonds**: 18 urban investment enterprises redeemed bond principal and interest in advance this week, involving 20 bonds with a total scale of 2.704 billion yuan [14][15]. - **Cancellation or Postponement of Urban Investment Bond Issuance**: No urban investment bonds were cancelled or postponed this week [16]. 2. Issuance of Local Government Bonds and Urban Investment Enterprise Bonds - **Local Government Bonds**: 45 local bonds were issued this week, with a scale of 231.79 billion yuan, a net financing of 110.229 billion yuan. The issuance of new special bonds exceeded half of the annual quota. The weighted average issuance interest rate rose to 1.80%, and the spread widened to 10.35BP [16]. - **Urban Investment Bonds**: 135 urban investment bonds were issued this week, with a scale of 88.943 billion yuan, and the net financing was - 3.301 billion yuan. The overall issuance interest rate was 2.13%, and the spread was 66.47BP. Four overseas urban investment bonds were issued, with a total scale of 4.467 billion yuan [20]. 3. Trading of Local Government Bonds and Urban Investment Enterprise Bonds - **Funds and Credit Rating Adjustment**: The central bank net - withdrew 22.65 billion yuan this week. On July 9th, 2025, Zhongzheng Pengyuan downgraded the rating of "22 Shenshan Investment MTN001" of Guangdong Shenshan Investment Holding Group Co., Ltd. from AAA to AA+ [23][24]. - **Trading Volume and Yield**: The trading volume of local government bonds was 390.614 billion yuan, a decrease of 30.89%. The trading volume of urban investment bonds was 284.91 billion yuan, a decrease of 2.16%. The yields of both mostly increased [24]. - **Abnormal Trading of Urban Investment Bonds**: 18 urban investment entities had 22 abnormal bond trades, with an increase in the number of entities, bonds, and trades [25]. 4. Important Announcements of Urban Investment Enterprises 86 urban investment enterprises issued announcements on changes in senior management, legal representatives, etc., including changes in executives, legal representatives, directors, and supervisors; changes in controlling shareholders and actual controllers; equity/asset transfers; changes in fund use; cumulative new borrowings; and external guarantees [29].