As of April 5th, the issuance of local government bonds this year has exceeded 2.84 trillion yuan, setting a new historical high for the same period. Among them, the issuance scale of local refinancing special bonds used to replace implicit debts has reached nearly 70% of the annual quota. Experts say that since the beginning of this year, the issuance of local bonds has shown characteristics such as large scale, fast progress, and wide coverage, and the progress of issuance and use is significantly faster than in previous years. The subsequent increase in local government bond supply may gradually increase, and it is expected to reach the peak of supply within the year in the second quarter. According to public data, among the 2.84 trillion yuan of local bonds issued by various regions, the newly added local bond size is 1.24 trillion yuan, and the refinancing local bond size is 1.6 trillion yuan. Since the beginning of this year, the issuance progress of refinancing bonds in local government bonds has been fast, mainly because this part of the debt has been verified multiple times and belongs to stock bonds. The earlier the issuance and the faster the replacement, the more beneficial it is for local governments to reduce risks and enterprises to reduce costs Zhang Yiqun, Vice Chairman of the Performance Committee of the Chinese Society of Finance, stated. Data shows that the total issuance scale of local refinancing special bonds used to replace implicit debts in the first quarter was nearly 1.34 trillion yuan, accounting for nearly 70% of the annual quota of 2 trillion yuan. Among them, Zhejiang, Shaanxi, Jiangsu, Inner Mongolia and other places have completed the annual issuance quota for 2025. According to the 2025 budget plan, the total amount of newly issued local bonds for the year is 5.2 trillion yuan. Among them, the progress of local new bond issuance in the first quarter accounted for more than 20%, roughly equivalent to the time schedule. However, the issuance of new special bonds is slightly slower than the time series. On March 28th, the General Office of the People's Government of Hunan Province announced the "Implementation Plan for the Pilot Program of Self Audit and Spontaneous Implementation of Local Government Special Bond Projects in Hunan Province", becoming the first region to announce the self audit and spontaneous implementation plan for local government special bonds. The industry believes that this is expected to inject a "stimulant" into the slow issuance of new local government bonds since the beginning of this year. Starting from April, the pace of government bond issuance may accelerate. Sun Binbin, Chief Economist of Caitong Securities, stated that on the one hand, the review time for special bonds will be shortened after the "self review and spontaneous" process, and new special bonds may see a surge in volume; On the one hand, special treasury bond may begin to be issued, and the special refinancing bonds that are still being issued may be superimposed. It is estimated that the supply scale in the second quarter will not be low, and the quarterly issuance scale may be about 7 trillion yuan. According to the issuance plans disclosed by various regions, as of March 31, 23 issuing entities across the country plan to issue 1826.406 billion yuan of local bonds in the second quarter, including 929.2435 billion yuan of new bonds and 897.163 billion yuan of refinancing bonds. From the perspective of fund allocation, the newly added special bond funds for projects in the first quarter were mainly invested in municipal and industrial park infrastructure, shantytown renovation, rail transit, land reserves and other fields. In the eyes of industry insiders, due to the "self audit and spontaneity" of pilot special bonds in multiple provinces this year, as well as the expansion of the investment and capital use scope of special bonds, special bond funds will play a greater role in investment leverage. After Guangdong took the lead in issuing special bonds through bidding in February this year, information on the acquisition of idle land projects in Jilin, Henan, Sichuan, Jiangxi, Fujian and other places has been publicly announced so far. Gao Yuhong, a researcher at the Credit Rating Department of Zhongzheng Pengyuan Industrial and Commercial Enterprise, analyzed that the land storage special bond not only provides short-term liquidity for the resolution of urban investment debt, reduces its high cost debt interest expenses, but also builds a long-term supply-demand balance framework for real estate destocking. Provinces with a high degree of land dependence and self audit of special bonds are expected to receive higher quotas for land storage special bonds. (New Society)