Recently, Pan Gongsheng, President of the People's Bank of China, proposed to vigorously develop scientific and technological innovation bonds and green bonds when reporting to the Standing Committee of the National People's Congress on financial work since October 2023. From the perspective of the capital market, according to Wind data statistics, as of November 12th, 431 technology innovation corporate bonds (hereinafter referred to as "science and technology innovation bonds") were issued in the exchange market this year, a year-on-year increase of 61.42%, with a total issuance scale of 500.771 billion yuan, a year-on-year increase of 68.75%. Among them, AAA rated high credit bonds are the main ones, accounting for over 90% of the total issuance scale. The interviewed experts believe that in the future, the expansion momentum of the science and technology innovation bond market will remain strong, the number and scale of issuances will continue to grow, the issuance structure will continue to optimize, and regulatory authorities are expected to introduce support measures such as tax incentives and financing guarantees to further support the issuance of science and technology innovation bonds. At the same time, the innovation efforts of science and technology innovation bond products will be increased to better support economic transformation and upgrading, as well as high-quality development. The issuance scale of science and technology innovation bonds has significantly increased since the beginning of this year, mainly due to two reasons. On the one hand, it lies in policy support. In April of this year, the China Securities Regulatory Commission issued the "Sixteen Measures for the High level Development of Technology Enterprises in the Capital Market", proposing to promote the high-quality development of technology innovation company bonds and improve the support mechanism for the bond market to serve technology innovation. We will focus on supporting bond financing for high-tech and strategic emerging industry enterprises, and encourage policy and market institutions to provide credit enhancement support for private technology-based enterprises to issue science and technology innovation bonds for financing. In June, seven departments, including the People's Bank of China and the Securities Regulatory Commission, jointly issued the Work Plan on Doing a Solid Job in Science and Technology Finance, established a green channel for the issuance of scientific and technological enterprise bonds, and promoted the issuance and financing of scientific and technological enterprises from financing docking, credit enhancement, rating and other aspects. Regulatory authorities have continuously introduced optimization and support measures, established green channels for issuance filing, shortened approval time, and improved issuance efficiency, providing convenience for technology innovation enterprises to raise funds through the bond market Mingming, Chief Economist of CITIC Securities, stated in an interview with reporters. Gao Huike, Senior Director and Senior Researcher of the R&D Department of Zhongzheng Pengyuan, told reporters that the expansion of the issuance scale of science and technology innovation bonds is driven by policies. Since the beginning of this year, developing new quality productive forces has been an important part of economic work, and the financial sector has also introduced a series of policies to support the development of technology finance. Science and technology innovation bonds are an important lever for the bond market to serve new quality productivity. To implement the development of science and technology finance, the scale of science and technology innovation bond issuance continues to expand. On the other hand, from the market situation, the demand for corporate bond financing is increasing under low interest rates. Based on the 3-year sci-tech innovation bonds issued by AAA rated entities, the average annual coupon rate was 2.41%, a decrease of 0.84 percentage points compared to the same period last year. In a low interest rate environment, the issuance interest rate of science and technology innovation bonds continues to decline, and the issuance cost drops, especially for medium and long-term science and technology innovation bond financing, which has a price advantage Mingming stated that, in addition, with the continuous deepening of the central and relevant departments' emphasis on new quality productivity and modern production systems, the financing demand of the capital market for technology innovation enterprises and projects will continue to increase, and the issuance quantity and scale of science and technology innovation bonds will also show a rapid growth trend. From the perspective of the issuance structure of science and technology innovation bonds, since the beginning of this year, the main issuers of science and technology innovation bonds have gradually become more diverse. State owned enterprises are still the main issuers, accounting for 95.82% and 97.22% of the total issuance quantity and scale, respectively; The number and scale of private enterprise issuances have increased, and there is also one foreign-funded enterprise issuing science and technology innovation bonds. In terms of issuer structure, central state-owned enterprises and high-quality private enterprises with good credit qualifications are the main force of issuance Gao Huike stated that in order to enhance the accessibility and convenience of bond financing for weaker qualified entities, it is necessary to rely on multiple measures such as diversified credit enhancement mechanisms, specialized credit rating systems, and high-yield bond markets to enhance the bond market's tolerance towards such entities. In addition, since the beginning of this year, the issuance period of science and technology innovation bonds has significantly extended, with 63.95% of the issuance scale being over 5 years, an increase of 27.5 percentage points year-on-year. The increase in the proportion of medium and long-term science and technology innovation bond issuance can better match the funding needs of science and technology innovation projects. From a local perspective, Beijing, Shaanxi, and Shandong have the largest issuance scale of science and technology innovation bonds, with 171.55 billion yuan, 45.5 billion yuan, and 45.1 billion yuan respectively. From the perspective of the industry (Wind Level 2), the issuance scale of capital goods, energy, and materials is relatively high, with 189.64 billion yuan, 74.6 billion yuan, and 60.94 billion yuan respectively. Since the beginning of this year, the exchange has strongly supported industrial enterprises, private enterprises, and other companies to issue corporate bonds, promoting enterprises and projects with scientific and technological innovation attributes to raise funds through the capital market. Therefore, the scale of scientific and technological innovation bond issuance in industries such as capital goods, energy, and materials is relatively large Wang Di, the head of Business Department 2 of Caida Securities' Bond Financing Department, said in an interview with reporters. Since the beginning of this year, multiple sci-tech innovation bonds have been labeled, such as supporting revolutionary old areas, the Guangdong Hong Kong Macao Greater Bay Area, the Green Silk Road, the digital economy, high growth industries, and specifically used for integrated circuits. In November 2024, Hegang Group Co., Ltd. successfully issued Technology Innovation Rural Revitalization Corporate Bonds (Supporting Revolutionary Old Areas) (Phase I) to professional investors, with an issuance scale of 1.5 billion yuan. It is planned to use no less than 70% of the bonds to repay the interest bearing liabilities of the Rural Revitalization (Supporting Revolutionary Old Areas) project. Wang Di stated that according to regulatory policies, science and technology innovation bonds have four subcategories, and the types and purposes of applying for the issuance of science and technology innovation bonds are already quite diverse, which has a certain promoting effect on the development of the field of scientific and technological innovation. The trend of "labeling" technology innovation bonds reflects the willingness of issuers to actively research and innovate "labeling" based on the use of funds under current regulatory policies, which is a manifestation of the significance of creating technology innovation bonds. Mingming clearly stated that through "labeling", Sci Tech Innovation Bonds can more accurately serve specific technological innovation fields and regional development needs, help improve the efficiency and targeting of fund utilization, and promote technological innovation in related fields and regions. At the same time, this also indicates that the Sci Tech Innovation Bond market is actively responding to national strategies and supporting the implementation of major national strategies through financial innovation. Mingming believes that in the next step, the sci-tech bond market will present four major trends. Firstly, the scale and quantity of science and technology innovation bond issuance continue to grow. With the improvement of technological innovation capabilities and the development of new quality productivity, the expansion momentum of the sci-tech bond market remains strong, and the issuance scale and quantity are expected to continue to grow. Secondly, the issuance structure continues to be optimized. The issuance period of science and technology innovation bonds has significantly extended, and the proportion of medium and long-term bonds has increased. The issuance structure will continue to be optimized to better match the funding needs of science and technology innovation projects. Again, policies and mechanisms are constantly being improved. It is expected that the central government and relevant departments will continue to introduce policies to support the issuance of science and technology innovation bonds, such as tax incentives and financing guarantee measures. Exchanges and interbank markets will also continuously innovate mechanisms, optimize review processes, and improve the efficiency of science and technology innovation bond issuance. Finally, there is variety innovation. It is expected that we will increase our efforts in variety innovation, vigorously develop "science and technology innovation+" bonds, support scientific and technological innovation projects, and leverage the social effectiveness of financial work in green, inclusive, elderly care, digital and other fields. (New Society)