Group 1: Monetary Policy and Market Operations - The People's Bank of China conducted a 7-day reverse repo operation of 32.5 billion yuan at a fixed rate of 1.40%, with a net injection of 15 billion yuan after accounting for maturing repos [3][4]. - The interbank market is experiencing a very loose liquidity environment, with the weighted average rate of DR001 falling over 3 basis points to around 1.27% [5]. - The latest transaction for one-year interbank certificates of deposit is around 1.51%, unchanged from the previous day [6]. Group 2: Economic Indicators and Government Actions - The PBOC's monetary policy committee discussed the integration of incremental and stock policies to maintain liquidity and align social financing scale with economic growth and price expectations [13]. - The Ministry of Finance announced arrangements for the issuance of various government bonds, including a 30-year bond on April 3 [13][14]. - Data from the Ministry of Finance shows that from January to February, state-owned enterprises reported total operating income of 12,565.5 billion yuan, a year-on-year increase of 0.2%, while total profits decreased by 2.0% [13]. Group 3: Global Economic Context - U.S. officials report that President Trump is willing to end military actions against Iran even if the Strait of Hormuz remains largely closed, indicating a shift towards diplomatic pressure [16]. - The European Central Bank's council member Müller suggests that the ECB's baseline scenario may be overly optimistic, with potential interest rate increases in the coming quarters if energy prices remain high [16]. Group 4: Bond Market Developments - Agricultural Development Bank plans to issue up to 14 billion yuan in financial bonds on April 1 [18]. - Morgan Stanley has downgraded its global equity rating from overweight to neutral while upgrading U.S. Treasury and cash ratings from neutral to overweight [19]. - A series of negative events in the bond market have been reported, including downgrades and delays in ratings for various issuers [20].

1. Report Industry Investment Rating No information provided in the report regarding the industry investment rating. 2. Core Viewpoints of the Report - In February 2026, bond supply decreased year - on - year, mainly dragged down by inter - bank certificates of deposit. The year - on - year decline in the supply of inter - bank certificates of deposit and interest - rate bonds in February 2026 was 739.6 billion yuan and 515.2 billion yuan respectively. The combined year - on - year decline in the new custody volume of inter - bank certificates of deposit and financial bonds in February 2026 was 890.4 billion yuan, possibly due to the delayed approval of bank bond issuance quotas. The new custody volume of corporate credit bonds decreased by 69.4 billion yuan year - on - year, mainly due to the decline in urban investment bonds [4][9][19]. - In February 2026, most institutions increased their bond allocations less, except for securities firms. Commercial banks (after considering the central bank's outright reverse repurchase) increased their bond holdings 886.8 billion yuan less year - on - year; asset management accounts (i.e., non - legal person products) increased their bond holdings 240.4 billion yuan less year - on - year, insurance companies increased their bond holdings 183.8 billion yuan less year - on - year, and securities firms increased their bond holdings 42.7 billion yuan more year - on - year [4][22]. - In March 2026, the supply of government bonds decreased by nearly 500 billion yuan year - on - year, possibly due to the decrease in the pressure of stabilizing economic growth. The supply of government bonds in April 2026 may increase slightly year - on - year. The supply of inter - bank certificates of deposit and bank financial bonds continued to decline in March 2026. If the quotas for inter - bank certificates of deposit and bank financial bonds are approved at the end of March or early April, their supply may increase in April [4][40][45]. - In March 2026, the net bond - buying scale of banks in the secondary market increased year - on - year, which was related to the low base last year and the weakening of credit demand in March this year. The net bond - buying scale of insurance companies in the secondary market decreased year - on - year, possibly because insurance companies increased the proportion of equity and other assets. The net bond - buying scale of asset management accounts decreased slightly year - on - year, possibly because the new scale of bank wealth management continued to decline [4][50][51]. 3. Summary by Relevant Catalogs 3.1 Bond Supply in February 2026 - **Overall Situation**: In February 2026, the bond custody balance was 196.39 trillion yuan, with a year - on - year growth rate of 10.42%, a decrease of 0.98 percentage points from the previous month. The new custody scale in February was 1060.4 billion yuan, a year - on - year decrease of 1439.1 billion yuan [4][6]. - **By Bond Type**: Inter - bank certificates of deposit were the main bond type with a year - on - year decline in supply in February. The supply of inter - bank certificates of deposit and interest - rate bonds decreased by 739.6 billion yuan and 515.2 billion yuan respectively year - on - year. Considering January and February together, the new custody volume of national bonds and local bonds this year was roughly the same year - on - year, but the new custody volume of policy - based financial bonds decreased significantly. The combined year - on - year decline in the new custody volume of inter - bank certificates of deposit and financial bonds in February 2026 was 890.4 billion yuan, possibly due to the delayed approval of bank bond issuance quotas. The new custody volume of corporate credit bonds decreased by 69.4 billion yuan year - on - year, mainly due to the decline in urban investment bonds [4][9][19]. 3.2 Bond Allocation by Institutions in February 2026 - **Overall Situation**: Most institutions increased their bond allocations less in February 2026, except for securities firms. Commercial banks (after considering the central bank's outright reverse repurchase) increased their bond holdings 886.8 billion yuan less year - on - year; asset management accounts increased their bond holdings 240.4 billion yuan less year - on - year, insurance companies increased their bond holdings 183.8 billion yuan less year - on - year, and securities firms increased their bond holdings 42.7 billion yuan more year - on - year [22]. - **Banks**: The bond - allocation intensity of banks decreased in February 2026. The scale of banks' increased holdings of government bonds/government bond net supply was 84.9%, significantly higher than the average of 77.9% in the past 12 months, but the bond - allocation intensity in February decreased compared with January, possibly related to the year - on - year decrease in the deposit - loan difference [28]. - **Insurance Companies**: The new bond investment scale of insurance companies decreased year - on - year in February 2026. Structurally, insurance companies mainly increased their allocations of local bonds less. After excluding supply disturbances, the bond - allocation intensity of insurance companies also weakened in February. The scale of insurance companies' increased holdings of government bonds/new government bond custody was about 0.6%, a decrease from January and significantly lower than the average of 9.2% in the past 12 months [29]. - **Asset Management Accounts**: The new scale of wealth management and the supply of inter - bank certificates of deposit both decreased significantly year - on - year in February 2026, leading to a year - on - year decrease in the bond - holding increase of asset management accounts. The new scale of wealth management in February 2026 was - 1.11 trillion yuan, lower than the same period from 2023 to 2025. The contraction of the supply of inter - bank certificates of deposit in February 2026 may also be an important reason for the decline in the bond - allocation intensity of asset management accounts [33]. - **Foreign Capital and Securities Firms**: Foreign capital decreased its bond holdings by 98.2 billion yuan year - on - year, mainly reducing its holdings of inter - bank certificates of deposit. The significant year - on - year decrease in the supply of inter - bank certificates of deposit in February 2026 may have limited the bond - allocation ability of foreign capital. Securities firms increased their bond holdings by 42.8 billion yuan year - on - year, mainly increasing their holdings of local bonds, possibly because the spread between local bonds and national bonds narrowed in February [38]. 3.3 Outlook for Bond Supply and Market Conditions - **Government Bonds**: In March 2026, the supply of government bonds decreased by nearly 500 billion yuan year - on - year, possibly due to the decrease in the pressure of stabilizing economic growth. The supply of government bonds in April 2026 may increase slightly year - on - year. The issuance of new local bonds in April 2026 is expected to increase year - on - year, but the issuance of refinancing bonds after deducting repayments may decrease. After combining various varieties, the supply of local bonds in April may increase slightly year - on - year [40]. - **Inter - bank Certificates of Deposit and Bank Financial Bonds**: The supply of inter - bank certificates of deposit and bank financial bonds continued to decline in March 2026. If the quotas for inter - bank certificates of deposit and bank financial bonds are approved at the end of March or early April, their supply may increase in April [45]. - **Banks, Insurance Companies, and Asset Management Accounts**: In March 2026, the net bond - buying scale of banks in the secondary market increased year - on - year, which was related to the low base last year and the weakening of credit demand in March this year. The net bond - buying scale of insurance companies in the secondary market decreased year - on - year, possibly because insurance companies increased the proportion of equity and other assets. The net bond - buying scale of asset management accounts decreased slightly year - on - year, possibly because the new scale of bank wealth management continued to decline [50][51].

Group 1 - The overall investment demand for credit bonds in April is expected to remain strong, with over 2 trillion yuan needing allocation [5][8] - The average net growth of wealth management products in April is projected to be 2.06 trillion yuan, following a seasonal increase [5][8] - Insurance premium income in April typically shows seasonal reduction, with an average premium income of approximately 352.6 billion yuan [5][9] Group 2 - April is historically a month of high issuance for credit bonds, with an average issuance of 1.4132 trillion yuan and a repayment amount of 1.1007 trillion yuan [21][22] - The expected net financing scale for April is around 205.2 billion yuan, leading to an anticipated issuance of 1.6836 trillion yuan in credit bonds [21][22] - Financial bonds may see concentrated supply in April, potentially creating trading opportunities in the primary and secondary markets [29] Group 3 - In March, funds were the absolute net buyers of 1-3 year credit bonds, with a net purchase of 801 billion yuan in this category [30][31] - The strategy for April recommends prioritizing the allocation of medium to short-term bonds, particularly those with a maturity of 3 years or less [42][43] - The yield for 5-year credit bonds has adjusted down to around 1.9%, indicating potential trading opportunities [42][43]

1. Report Industry Investment Rating The provided text does not mention the industry investment rating. 2. Core Viewpoints of the Report - The central bank had a net withdrawal of 281.9 billion yuan in the open - market operations this week [5]. - The yield of medium - and long - term credit bonds decreased significantly, while the short - term yield mostly decreased slightly [2][22]. - The credit spread of the AA+ non - bank financial industry widened significantly, and the fluctuations of credit spreads of other industries and ratings were within 5BP [2][24]. - After the end of the quarter, the scale of wealth management products in April 2026 is expected to resume positive monthly growth, which will support the allocation of credit bonds [3]. - The current credit spreads of different varieties are at a relatively low historical level, and the credit spreads of 4 - 5Y credit bonds may still have some room to decline [3]. 3. Summary by Directory 3.1 Primary Market - The net financing of traditional credit bonds increased, and the net financing of asset - backed securities decreased by 36.2 billion yuan compared with last week [1][8]. - The net financing of urban investment bonds increased by 69.1 billion yuan, and that of industrial bonds increased by 55.8 billion yuan, while the net financing of financial bonds decreased by 64.2 billion yuan [8]. - The issuance volume of urban investment bonds increased by 47, and the redemption volume decreased by 49; the issuance volume of industrial bonds decreased by 21, and the redemption volume decreased by 36; the issuance volume of financial bonds decreased by 3, and the redemption volume remained unchanged [10]. 3.2 Secondary Market 3.2.1 Trading Volume - The trading volume of credit bonds decreased by 60.5 billion yuan compared with last week. The trading volume of urban investment bonds decreased by 6.7 billion yuan, that of industrial bonds decreased by 0.5 billion yuan, and that of financial bonds decreased by 53.4 billion yuan. The trading volume of asset - backed securities increased by 3.1 billion yuan [17]. - The turnover rate of traditional credit bonds decreased, while that of asset - backed securities increased slightly [17]. 3.2.2 Yield - The yields of 1Y AA, AAA -, and AAA+ credit bonds decreased by no more than 1BP; the yields of 5Y AA, AAA -, and AAA+ credit bonds decreased by 4BP, 3BP, and 2BP respectively; the yields of 10Y AA, AAA -, and AAA+ credit bonds decreased by 4BP [22]. - Taking AA+ 5Y bonds of various varieties as an example, the yields of different varieties decreased to varying degrees [23]. 3.2.3 Credit Spread - The credit spread of the AA+ non - bank financial industry widened by 10BP, and the fluctuations of credit spreads of other industries and ratings were within 5BP [24]. - For urban investment bonds, the credit spreads of different maturities fluctuated slightly within 2BP. The credit spreads of most regions decreased, except for Hainan AA+ and Xinjiang AAA [30][32]. - For industrial bonds, the short - term credit spreads continued to narrow, and the 10Y long - term spreads decreased slightly [35]. - For bank capital bonds, the credit spreads of medium - and long - term bank Tier 2 and perpetual bonds decreased slightly [38]. 3.3 Bond Market舆情 - The implied ratings of 15 debt issues issued by AVIC Industry Finance Holdings Co., Ltd. were downgraded, and the implied rating of "Gucanal A" issued by Wuxi Chengnan Construction Investment and Development Co., Ltd. was downgraded [40]. 3.4 Investment Suggestions - Overall, the credit spread of the AA+ non - bank financial industry widened significantly, and the fluctuations of credit spreads of other industries and ratings were within 5BP. - For urban investment bonds, the credit spreads of different maturities fluctuated slightly within 2BP. - For industrial bonds, the short - term credit spreads continued to narrow, and the 10Y long - term spreads decreased slightly. - For bank capital bonds, the credit spreads of medium - and long - term bank Tier 2 and perpetual bonds decreased slightly [5][42].

1. Report Industry Investment Rating No relevant information provided. 2. Core Viewpoints of the Report - The mid - long - end of Tier 2 capital bonds and perpetual bonds of banks has recovered, and the curve of ordinary and perpetual bonds continues to steepen. The 2 - 3 - year ordinary and perpetual bonds are more favored by institutions. Considering the unclear geopolitical conflict pattern and inflation concerns, the 3Y - 2Y interval can be used as a key allocation area in the future [2][3][17]. - The trading volume of mid - long - term Tier 2 capital bonds and perpetual bonds has decreased, while the trading volume of urban investment bonds has increased significantly, driving the overall increase in the trading volume of ordinary and perpetual bonds [18][21]. - In primary issuance, the issuance of industrial bonds has increased, while the issuance of Tier 2 capital bonds and perpetual bonds remains at a low level. The issuance of science and innovation bonds has decreased compared with the previous period but still shows a significant year - on - year increase [26][29][30]. 3. Summary According to the Directory 3.1 Secondary Market: Divergent Trends of Tier 2 Capital Bonds and Perpetual Bonds, and an Increase in the Trading Volume of Urban Investment Bonds 3.1.1 Market Trends - **Tier 2 Capital Bonds**: The yields of all maturities have generally declined, with the mid - long - end declining more than the short - end. The spreads have been comprehensively compressed, and the curve shows a co - existence of local steepening in the middle and flattening at the long - end [9]. - **Perpetual Bonds**: The yield and spread trends are similar to those of Tier 2 capital bonds. The 2 - 3 - year maturity has relatively high cost - effectiveness, while the long - term bonds are more volatile [10]. - **Ordinary and Perpetual Bonds**: The curve steepening is further strengthened. The yields of 1 - 5 - year maturities generally decline, and the long - end steepening is more significant [13][14]. - **Urban Investment Bonds**: The yields of all maturities generally decline, and the curve steepening trend continues. The 2 - 3 - year maturity has a relatively large decline in yield [16]. 3.1.2 Trading Volume - **Tier 2 Capital Bonds and Perpetual Bonds**: The trading volume of mid - long - term bonds has decreased. The total trading volume of Tier 2 capital bonds has decreased by about 279 billion yuan, and that of perpetual bonds has decreased by about 252 billion yuan [18]. - **Ordinary and Perpetual Bonds**: The total trading volume has increased significantly, with an increase of more than 260 billion yuan. The trading volume of industrial bonds, urban investment bonds, and quasi - urban investment bonds has all increased to varying degrees [21]. - **High - Yield Urban Investment Bonds**: The high - yield trading last week was mainly concentrated in Shandong, Beijing, Sichuan, Fujian, Guizhou, Jiangxi and other places [25]. 3.2 Primary Issuance: Increased Issuance of Industrial Bonds, and Low - level Issuance of Tier 2 Capital Bonds and Perpetual Bonds - **Ordinary and Perpetual Bonds**: The total issuance last week was about 397 billion yuan, with a net financing of about 117 billion yuan. The issuance of industrial bonds has increased significantly, and the issuance of urban investment bonds has increased slightly [26]. - **Financial Bonds**: The total issuance last week was about 50.2 billion yuan, with a net financing of about 2.4 billion yuan. The issuance of securities company bonds is still the main force, and the issuance of Tier 2 capital bonds, commercial financial bonds, and TLAC non - capital bonds remains at a low level [29]. - **Science and Innovation Bonds**: The issuance last week was about 58.4 billion yuan, with a net financing of about 42.1 billion yuan. Although the issuance and net financing scale have declined compared with the previous period, they still show a significant year - on - year increase [30].

Economic Review and 2026 Outlook - In 2025, the actual GDP growth rates for Q1 to Q4 were 5.4%, 5.2%, 4.8%, and 4.5%, while nominal GDP growth rates were 4.6%, 3.9%, 3.7%, and 3.9% respectively, indicating a downward trend in actual GDP growth throughout the year [4][10] - Fixed asset investment (excluding rural households) decreased by 3.8%, the lowest since 2010, while retail sales of consumer goods grew by 3.7%, and export growth (in RMB terms) was 6.1% [4][19] - The economic state in 2025 was characterized by strong supply but weak demand, with resilient production and exports, but persistent weakness in domestic demand [4][19] 2026 Policy and Institutional Behavior Outlook - A moderately loose monetary policy is expected, with a forecasted policy interest rate cut of 10-20 basis points, and a potential reserve requirement ratio (RRR) cut of 50-100 basis points [4][62][66] - The net financing scale of government bonds in 2026 is projected to be around 13.8 trillion yuan, remaining stable compared to the previous year [4][76] - The influence of trading desks on the bond market is anticipated to weaken, while the pricing power of banks and insurance funds is expected to increase due to lower funding costs [4][62][79] Investment Recommendations - The bond market in 2026 is expected to perform better than anticipated, with a projected net issuance of around 20 trillion yuan and significant demand from banks and insurance funds [4][58] - The 10-year government bond yield is expected to fluctuate between 1.6% and 1.9%, while the 30-year government bond yield is projected to be between 1.9% and 2.4% [4][58] - Investors are advised to focus on opportunities in long-term bonds and to monitor oil price fluctuations and changes in risk appetite [4][58]

1. Report Industry Investment Rating The provided content does not mention the industry investment rating. 2. Core Viewpoints of the Report - The overall risk of small and medium - sized banks has decreased, but there is still credit stratification. A multi - dimensional bank scoring system is established to support investment strategies such as credit sinking [3]. - Effectively identifying industry risk characteristics is the starting point for constructing the score, including high systemic importance, bearing certain policy - related functions, pro - cyclicality, being greatly affected by regional fundamentals, obvious influence of corporate governance, high leverage, and risk concealment [3]. - Through a top - down analysis paradigm, the industry risk center is confirmed, and then individual scoring sequences are studied. Business development, profitability, asset quality, capital level, and individual comprehensive indicators are analyzed [3]. - The scoring results are verified to be effective, and credit mining can be carried out accordingly. Banks are divided into different risk - preference groups, and low - risk and high - cost - performance banks are recommended [3]. 3. Summary According to Relevant Catalogs 3.1 Banking Credit Risk Characteristics - Banks are of high systemic importance. Different banks have different degrees of systemic importance, and a multi - level regulatory system controls industry risk levels, resulting in a higher credit quality center and lower bond - issuing yields compared to other industries [10]. - Banks bear certain policy - related functions. State - owned banks participate in risk disposal of other banks, and local city and rural commercial banks support local economic development and debt resolution [11]. - Banks are pro - cyclical. Their asset growth and credit levels are related to the economic cycle, and risk - disposal policies can hedge the pressure of non - performing assets [12]. - Banks are greatly affected by regional fundamentals. Local banks' asset quality is closely related to regional investment and financing, resource endowment, and hidden debts. National banks' risk differences come from customer levels and regional penetration [13]. - Corporate governance has an obvious impact. The background of bank shareholders affects credit quality. After industry rectification, the corporate governance risk has been effectively reduced, and private shareholders should be observed from a more comprehensive perspective [15]. - Banks have high leverage. A small amount of bad assets can cause capital adequacy pressure, and domestic bank risk events often manifest as the spill - over of non - performing assets [16]. - Bank risks are concealed. Banks may take measures to delay and whitewash risks before they are exposed, and the actual non - performing assets are often higher than the observable figures [16]. 3.2 Top - Down Credit Analysis 3.2.1 Business Development The growth trend and structure of the banking industry's assets contribute weakly to profit growth, but the low loan growth rate limits the pressure on capital consumption, and the industry's internal capital pressure maintains a tight balance [19]. 3.2.2 Profitability The net interest margin of commercial banks has been decreasing year by year, reaching 1.42% at the end of 2025. In 2026, the narrowing of the net interest margin may further slow down, which is conducive to banks' internal capital replenishment [26]. 3.2.3 Asset Quality The non - performing loan ratio of commercial banks has gradually decreased in the past five years, but the proportion of loss - type loans has increased, which may affect capital adequacy. Different types of banks have different asset - quality situations, and currently, the provision for non - performing loans is sufficient [32]. 3.2.4 Capital Level The capital adequacy ratio of commercial banks has generally shown a fluctuating upward trend in the past five years. Large - scale commercial banks have a high capital adequacy ratio, and the overall credit risk of the industry is not high [41]. 3.2.5 Bank Individual Comprehensive Credit Analysis Framework A multi - perspective evaluation index system is needed to identify individual - specific risks of banks, and the financial data, business logic, and operating environment should be mutually verified [43]. 3.3 Banking Credit Analysis Model and Scoring Results 3.3.1 Scoring Standards Core analysis indicators are selected, including asset quality, profitability, capital adequacy, liquidity, regional operating environment, corporate governance, and adjustment items. The scoring rules for each indicator are determined [49][51]. 3.3.2 System - Important Banks 21 domestic system - important banks are identified and divided into five groups. Their secondary - capital bonds and perpetual bonds have low 1 - year bond valuation yields, and only their key indicators are presented [60]. 3.3.3 Non - System - Important Banks The credit scores of the top 30 non - system - important banks in terms of secondary - capital bond and perpetual - bond stock balances are calculated. The Spearman correlation coefficients of secondary - capital bonds and perpetual bonds are - 0.70 and - 0.75 respectively, indicating that the scoring model has strong identification effectiveness. Low - risk and high - cost - performance banks are recommended [63][80][81]

Market Overview - The central bank conducted a reverse repurchase operation of 137.3 billion yuan for 7-day terms at a fixed rate of 1.40%, with a net injection of 88.8 billion yuan after accounting for 48.5 billion yuan maturing on the same day [3][4]. - The interbank market remains loose, with the weighted average rate of D R001 slightly rising to around 1.32%, while overnight rates on the anonymous click system (X-repo) stabilized at 1.3% [5][6]. - The latest transaction for one-year interbank certificates of deposit is around 1.54%, showing a slight increase from the previous day [8]. Bond Market - The yields on major interbank bonds have shown fluctuations, with the 30-year main contract dropping by 0.43%, the 10-year by 0.11%, the 5-year by 0.08%, and the 2-year by 0.04% [13]. - The Ministry of Finance plans to conduct market support operations for government bonds on March 17, and the Agricultural Development Bank will issue financial bonds totaling no more than 10 billion yuan on the same day [21]. - A total of over 10 billion yuan has been distributed in dividends by bond funds this year, with 20 products exceeding 1 billion yuan in payouts [21]. Economic Indicators - China's fixed asset investment grew by 1.8% year-on-year in January-February, a recovery from a 3.8% decline in the previous year, while industrial value-added increased by 6.3% [15]. - The average urban unemployment rate remained stable at 5.3%, with real estate development investment down by 11.1% and new housing sales area declining by 13.5% [15]. - The housing price data for 70 cities indicates a continued narrowing of the decline in new residential prices, with 10 cities experiencing price increases [16]. Regulatory Updates - The Shanghai government has adjusted the minimum down payment ratio for commercial property loans to no less than 30% starting March 16 [16]. - The National Financial Supervision Administration has issued interim measures for the regulatory rating of wealth management companies, categorizing them into levels 1-6 and S level, with higher ratings indicating greater risk [16].

1. Report Industry Investment Rating There is no mention of the industry investment rating in the provided report. 2. Core Viewpoint of the Report - This week (March 9 - March 13), credit bond yields declined, but the repair amplitude was smaller than that of interest - rate bonds, and credit spreads widened passively. The February inflation and January - February import and export data released this week disturbed market expectations. Due to the rebound in February CPI and January - February import and export data, market concerns about inflation pressure increased, and bond market sentiment weakened temporarily. Meanwhile, the overall capital environment was stable, the fluctuation of money market interest rates was limited, which provided a certain buffer for the bond market. The equity market is still in a volatile range, and the overall risk preference has not changed much, so its impact on the bond market is relatively limited [2][11]. - Currently, the yield curve forms a relatively obvious convex point around the 4 - year term. Institutions with relatively stable liability ends can pay attention to the riding value of 4 - year bonds. In the scenario where the yield curve rises by 20BP, 4 - year AA - rated medium - short notes, 4 - year AA and AA(2) - rated urban investment bonds, and 4 - year AAA - and AA + - rated bank perpetual bonds are expected to maintain positive returns or only have small drawdowns during the holding period, with relatively strong anti - volatility ability. For 7 - year urban investment bonds, caution should be exercised, and for 7 - year secondary perpetual bonds, allocation - type funds can choose the opportunity to layout after market adjustments [13][14]. - The issuance of secondary capital bonds and perpetual bonds has obvious seasonal characteristics. Although there is still a high maturity and redemption scale of secondary perpetual bonds this year, and the renewal demand still exists, in the context of the continuous expansion of capital replenishment channels, commercial banks' dependence on secondary perpetual bonds has decreased, and the overall future supply scale may decline [17][18]. 3. Summary According to the Directory 3.1. Focus on Convex Point Riding, and the Supply of Secondary Perpetual Bonds May Decline - Market situation: This week, credit bond yields declined, but the repair amplitude was smaller than that of interest - rate bonds, and credit spreads widened passively. The February inflation and January - February import and export data disturbed market expectations, and bond market sentiment weakened temporarily. The equity market was in a volatile range, and its impact on the bond market was relatively limited [2][11]. - Investment strategy: The current yield curve forms a convex point around the 4 - year term. In the case of a 3 - month holding period and the curve shape remaining unchanged, the holding - period returns of 4 - year bonds are generally higher than those of 5 - year bonds of the same rating. Institutions with relatively stable liability ends can pay attention to their riding value. In the scenario where the yield curve rises by 20BP, 4 - year AA - rated medium - short notes, 4 - year AA and AA(2) - rated urban investment bonds, and 4 - year AAA - and AA + - rated bank perpetual bonds have relatively strong anti - volatility ability. For 7 - year urban investment bonds, caution should be exercised, and for 7 - year secondary perpetual bonds, allocation - type funds can choose the opportunity to layout after market adjustments [13][14]. - Supply situation: The issuance of secondary capital bonds and perpetual bonds has obvious seasonal characteristics. This year, secondary perpetual bonds are still in a peak maturity stage, with an expected annual maturity and redemption scale of about 1.18 trillion yuan, and banks still have a certain renewal demand. However, in the long - term, the net financing scale of secondary perpetual bonds has been declining in recent years. With the diversification of bank capital replenishment channels, the dependence of commercial banks on secondary perpetual bonds has decreased, and the future supply scale may decline [17][18]. 3.2. Review of the Quantity and Price of Inter - bank Liquidity - This week (March 9 - March 13), the volume of the inter - bank pledged repurchase market decreased and the price increased. The median daily trading volume of inter - bank pledged repurchase was 8.51 trillion yuan, a decrease of 260.2 billion yuan from last week, and the trading volume was in the top 2.9% of the range since 2020. The median R001 was 1.39%, an increase of 4bp from last week, and the repurchase interest rate was in the bottom 21% of the range since 2020. The median spread between R001 and DR001 was 6.7bp, a decrease of 0.6bp from last week; the median spread between GC001 and R001 was 11.0bp, an increase of 20.3bp from last week, and the exchange financing cost was higher than that of the inter - bank [38][40]. - In terms of interest rate swaps, the 1 - year FR007 IRS interest rate increased this week. The median 1 - year FR007 IRS was 1.50%, an increase of 2.1bp from last week, and the interest rate was in the bottom 5% of the range since 2020. The median 1 - year SHIBOR 3 - month IRS was 1.56%, and the interest rate was in the bottom 4% of the range since 2020 [43]. 3.3. Review of the Inter - bank Certificate of Deposit Market - On March 13, SHIBOR overnight, 7 - day, 1 - month, 3 - month, 6 - month, 9 - month, and 1 - year quotes were 1.32%, 1.46%, 1.53%, 1.54%, 1.56%, 1.57%, and 1.58% respectively. Compared with March 6, the overnight and above - term quotes changed by 0bp, 5bp, - 1bp, - 1bp, - 1bp, - 1bp, - 1bp respectively. The yields to maturity of 1 - month, 3 - month, 6 - month, 9 - month, and 1 - year inter - bank certificates of deposit of AAA - rated commercial banks were 1.5%, 1.5%, 1.51%, 1.52%, 1.53% respectively. Compared with March 6, the 1 - month and above - term yields changed by 1bp, 0bp, - 1bp, - 1bp, - 2bp respectively [44]. - This week, the total primary issuance volume of inter - bank certificates of deposit was 842.5 billion yuan (excluding those whose actual raised amounts have not been disclosed as of March 13), an increase of 125.2 billion yuan from last week. In terms of issuance terms, the proportions of 6 - month and 9 - month terms increased, while the proportions of 1 - month, 3 - month, and 1 - year terms decreased [48]. - On March 13, the 1 - year FR007 IRS interest rate was 1.50%, an increase of 3.11bp from last week. The yield of 1 - year AAA - rated inter - bank certificates of deposit decreased by 1.75bp from last week, and the spread between the two was 3bp, a narrowing of 5bp from last week [50]. 3.4. Credit Bond Issuance Situation 3.4.1. Issuance Volume and Net Financing - This week (March 9 - March 13), the supply of credit bonds increased both month - on - month and year - on - year. The issuance of credit bonds was 350.333 billion yuan, a month - on - month increase of 18.21% and an increase of 96.211 billion yuan compared with the same period last year. The net financing of credit bonds decreased by 36.707 billion yuan month - on - month and increased by 61.262 billion yuan year - on - year. In terms of types, the net financing of urban investment bonds, industrial bonds, and financial bonds decreased by 43.783 billion yuan, 21.115 billion yuan, and increased by 28.190 billion yuan respectively month - on - month [55]. 3.4.2. Issuance Cost - The average issuance interest rate of credit bonds decreased this week. The average issuance interest rate of credit bonds was 2.81%, a decrease of 6bp from last week. In terms of types, the average issuance interest rates of industrial bonds, urban investment bonds, and financial bonds decreased by 13bp, 6bp, and increased by 2bp respectively month - on - month; in terms of ratings, the average issuance interest rates of AA, AA +, and AAA decreased by 16bp, 2bp, and 11bp respectively month - on - month [66]. 3.4.3. Issuance Term - The average issuance term of credit bonds increased this week. The average issuance term of credit bonds was 2.97 years, an increase of 0.02 years from last week. In terms of types, the issuance terms of industrial bonds, urban investment bonds, and financial bonds increased by 0.29 years, decreased by 0.46 years, and increased by 0.24 years respectively month - on - month [68]. 3.4.4. Cancellation of Issuance - This week, the number of cancelled credit bond issuances was the same as last week, and the scale decreased. A total of 12 credit bonds were cancelled for issuance, the same as last week, and the total cancelled issuance scale was 7.5 billion yuan, a decrease of 0.46 billion yuan from last week [69]. 3.5. Credit Bond Transaction and Valuation Situation 3.5.1. Transaction Volume - This week (March 9 - March 13), the total transaction volume of credit bonds was 1,435 billion yuan, a decrease of 1.3 billion yuan from last week. In terms of categories, commercial bank bonds and non - bank financial bonds in financial bonds traded 455.4 billion yuan and 90 billion yuan respectively. Medium - term notes, short - term financing bills, directional instruments, enterprise bonds, and corporate bonds traded 333 billion yuan, 122.2 billion yuan, 55.4 billion yuan, 18.4 billion yuan, and 360.8 billion yuan respectively. Compared with last week, the trading volumes of various varieties showed mixed trends. The trading volume of urban investment bonds decreased the most, by 15.8 billion yuan. The trading volume of industrial bonds decreased by 10.3 billion yuan, while the trading volumes of bank perpetual bonds and bank secondary capital bonds increased by 7.6 billion yuan and 7.4 billion yuan respectively; the trading volumes of securities firm sub - bonds and insurance sub - bonds decreased slightly by 1.1 billion yuan and 0.3 billion yuan respectively [74]. - In terms of remaining terms, the transaction term structure of urban investment bonds shifted to the medium - long term, the proportion of transactions within 1 year decreased by 4.58pct, while the proportions of 1 - 2 years, 2 - 3 years, 3 - 5 years, and over 5 years increased by 0.83pct, 2.69pct, 0.18pct, and 0.88pct respectively; the term structure of industrial bonds concentrated on 1 - 3 years, the proportion within 1 year decreased by 1.10pct, the proportion of 1 - 2 years increased by 2.93pct, the proportion of 2 - 3 years increased by 0.13pct, the proportion of 3 - 5 years decreased by 1.44pct, and the proportion of over 5 years decreased by 0.51pct; the term structure of bank secondary capital bonds was generally stable, the proportion within 1 year increased by 0.04pct, the proportion of 1 - 2 years decreased by 0.15pct, and the proportion of over 5 years increased by 0.11pct; the term of bank perpetual bonds shifted to the short - end, the proportion within 1 year increased by 3.05pct, the proportion of 1 - 2 years increased by 0.49pct, the proportion of 2 - 3 years increased by 1.72pct, and the proportion of 3 - 5 years decreased by 5.25pct; the term structure of securities firm sub - bonds concentrated on 3 - 5 years, the proportion within 1 year increased by 1.59pct, the proportion of 1 - 2 years decreased by 5.03pct, the proportion of 2 - 3 years decreased by 9.28pct, and the proportion of 3 - 5 years increased by 12.72pct; the term of insurance sub - bonds concentrated on the short - term, the proportion within 1 year increased by 12.94pct, and the proportion of over 5 years decreased by 12.94pct [75]. - In terms of implied ratings, the rating structure of urban investment bonds concentrated on lower ratings, AAA decreased by 0.90pct, AAA - decreased by 0.01pct, AA + remained unchanged (0.00pct), AA increased by 0.14pct, AA(2) decreased by 0.06pct, and AA - increased by 0.85pct; the rating structure of industrial bonds showed differentiation, AAA increased by 1.16pct, AAA - increased by 0.34pct, AA + decreased by 2.02pct, AA increased by 1.13pct, AA(2) decreased by 0.12pct, and AA - increased by 0.12pct; the ratings of bank secondary capital bonds were differentiated, AAA - increased by 4.78pct, AA + decreased by 4.39pct, AA decreased by 0.42pct, and AA - increased by 0.06pct; the ratings of bank perpetual bonds tilted towards AAA -, the proportion of AAA remained unchanged (0.00pct), AAA - increased by 9.07pct, AA + decreased by 7.99pct, AA decreased by 2.40pct, and AA - increased by 1.10pct; the ratings of securities firm sub - bonds concentrated on AA +, AAA - decreased by 8.36pct, AA + increased by 11.03pct, AA decreased by 2.88pct, and AA - increased by 0.14pct; the proportions of various ratings of insurance sub - bonds showed differentiation, AA + increased by 3.55pct, AA increased by 11.64pct, and AA - decreased by 13.17pct [76]. 3.5.2. Spread Tracking - The yields of credit bonds showed differentiation at various levels and terms. This week, except for the yields of 5 - year bonds at all levels, 3 - year and 4 - year AAA - rated bonds, which generally increased, the others generally decreased. Among them, the yields of 1 - year bonds at all levels decreased slightly by 1.73BP. The yield of 5 - year AA - rated bonds decreased the most, by 2.15BP. The current yield percentile levels of all levels are relatively low, the percentiles of the medium - short end are generally lower than those of the long end, the 1 - year AA is at an extremely low percentile of 0.3% since 2025, the 4 - year AA yield percentile is at 24.4%, and the 5 - year AAA is at a percentile of 22.0%. - The credit spreads of 1 - year bonds at all levels, 4 - year AA + and AA - rated bonds narrowed, while the others widened. Among them, the spread of 4 - year AA - rated bonds narrowed the most, by 1.73BP, the narrowing amplitude of 1 - year bonds at all levels was 0.09BP, and the spread of 3 - year AAA - rated bonds widened by 2.48BP. In terms of spread percentiles, the spreads of all levels are generally in a relatively low range, among which the spread percentiles of 1 - year bonds at all levels are relatively low, all between 0.3% - 0.6% [79]. - The yields of urban investment bonds showed differentiation at various levels and terms. The 1 - year yields generally decreased, while the 2 - year, 4 - year, and 5 - year yields generally increased. Among them, the yields of 1 - year bonds at all levels decreased significantly, with AAA decreasing by 1.59BP, and AA + and AA decreasing by 1.58BP. The yields of 5 - year bonds at all levels increased synchronously, with AAA increasing by 0.90BP, AA + increasing by 1.60BP, and AA increasing by 0.6BP. This week, except for the yields of 2 - year, 3 - year AA, 4 - year, and 5 - year bonds at all levels, which increased, the yields of 1 - year bonds at all levels, 3 - year AAA, and 3 - year AA + at all levels decreased, and the short - end decline was relatively significant. The current yield percentile levels of all levels are relatively low, the percentiles of the medium - short term are generally lower than those of the long term, the 1 - year bonds at all levels are at an extremely low percentile of 0.3% since 2025

1. Report Industry Investment Rating - Not provided in the report 2. Core View of the Report - Amid the "asset shortage" of credit bonds, with interest rates continuously fluctuating at low levels and increasing difficulty in capital gain speculation, it is recommended to focus on the stable income value of high - coupon assets[4][43] 3. Summary by Directory 3.1 This Week's Credit Hot Events - Some member banks participated in the market interest rate pricing self - regulatory mechanism meeting and were required to strengthen self - management. The proportion of inter - bank current deposits with an interest rate higher than the 7 - day reverse repurchase OMO policy rate (1.4%) at the end of the quarter should not exceed 10% - 20%. It is expected that the interest rate of over 10 trillion inter - bank deposits may be lowered, which is directly beneficial to short - term bonds. As of March 13, 2026, the 3M/6M inter - bank certificate of deposit rates were 1.50%/1.525%, approaching the lowest point since 2020, driving down the short - term credit bond yields this week[9] 3.2 Primary Market - The net financing of credit bonds (excluding asset - backed securities) this week was 11.91 billion yuan, an increase of 6.9 billion yuan compared with last week. The total issuance volume was 41.95 billion yuan, an increase of 15.18 billion yuan, and the total repayment volume was 30.04 billion yuan, an increase of 8.28 billion yuan. The net financing of asset - backed securities was - 0.44 billion yuan, a decrease of 0.06 billion yuan compared with last week. By product type, the net financing of urban investment bonds was 1.85 billion yuan, an increase of 0.75 billion yuan; that of industrial bonds was 7.86 billion yuan, an increase of 3.88 billion yuan; and that of financial bonds was 2.20 billion yuan, an increase of 2.27 billion yuan. In terms of issuance and redemption quantity, the issuance and redemption quantities of urban investment bonds, industrial bonds, and financial bonds all increased compared with last week[13][15] 3.3 Secondary Market 3.3.1 Transaction Situation - The trading volume of credit bonds (excluding asset - backed securities) decreased by 1.82 billion yuan compared with last week. Among them, the trading volume of urban investment bonds decreased by 2.61 billion yuan, that of industrial bonds decreased by 1.51 billion yuan, that of financial bonds increased by 2.30 billion yuan, and that of asset - backed securities decreased by 0.54 billion yuan. In terms of turnover rate, the turnover rates of different types of credit bonds increased or decreased compared with last week. The turnover rate of urban investment bonds was 1.47%, a decrease of 0.17 pct; that of industrial bonds was 1.76%, a decrease of 0.08 pct; that of financial bonds was 3.16%, an increase of 0.14 pct; and that of asset - backed securities was 0.3%, a decrease of 0.13 pct[18] 3.3.2 Yield - The yield fluctuations of credit bonds with different ratings and maturities this week did not exceed 3BP compared with last week. Specifically, the yields of 1Y AA, AAA -, and AAA + credit bonds decreased by 2BP, 3BP, and 1BP respectively; the yields of 5Y AA, AAA -, and AAA + credit bonds increased by 1BP, 1BP, and 2BP respectively; and the yields of 10Y AA, AAA -, and AAA + credit bonds increased by <1BP, <1BP, and 2BP respectively. Taking AA + - rated 5Y bonds of each type as an example, the yields of different types of bonds all increased to varying degrees this week[22][24] 3.3.3 Credit Spreads - Overall, the credit spreads of AA + communication and non - bank financial industries widened significantly compared with last week, and the credit spread of AA + machinery and equipment industry widened slightly. The fluctuations of credit spreads of other industries and ratings did not exceed 10BP. Specifically, the credit spreads of AA + communication and non - bank financial industries widened by 29BP and 13BP respectively, the credit spread of AA + machinery and equipment industry widened by 6BP, and the credit spread of AA + pharmaceutical and biological industry compressed by 6BP. The fluctuations of credit spreads of other industries and ratings did not exceed 5BP[28] - **Urban Investment Bonds**: The credit spreads of urban investment bonds with different maturities fluctuated slightly within 3BP this week. By region, except for a slight compression of credit spreads in a few regions, the credit spreads of most regions widened by no more than 5BP[30][33] - **Industrial Bonds**: Except for the slight widening of the spreads of 1Y AAA, AA, and 3Y AAA renewable industrial bonds, the credit spreads of industrial bonds with other maturities compressed to varying degrees compared with last week[35] - **Bank Capital Bonds**: The credit spreads of bank Tier 2 and perpetual bonds within 3Y mostly compressed slightly compared with last week, while the long - term credit spreads of 5Y and above mostly widened slightly[37] 3.4 This Week's Bond Market Public Opinions - The implied ratings of 27 bond issues issued by Guangzhou Urban Construction and Development Co., Ltd. were downgraded; the implied ratings of 4 bond issues issued by Shenzhen Qianhai Lianyirong Commercial Factoring Co., Ltd. were downgraded; and the entity rating of Zhongnengtiehan Ecological Environment Co., Ltd. was downgraded[39] 3.5 Investment Recommendations - This week, the central bank had a net withdrawal of 25.11 billion yuan. Overall, the credit spreads of AA + communication and non - bank financial industries widened significantly, and the credit spread of AA + machinery and equipment industry widened slightly. The credit spreads of other industries and ratings fluctuated within 10BP. The credit spreads of urban investment bonds with different maturities fluctuated slightly within 3BP. Except for the slight widening of the spreads of 1Y AAA, AA, and 3Y AAA renewable industrial bonds, the credit spreads of industrial bonds with other maturities compressed. The credit spreads of bank Tier 2 and perpetual bonds within 3Y mostly compressed slightly, while the long - term credit spreads of 5Y and above mostly widened slightly. It is recommended to focus on the stable income value of high - coupon assets[42][43]