The issuance of this year's ultra-long-term special government bonds is approaching, with the first tender scheduled for April 24. Government bond financing has already accelerated at the beginning of the year.

The issuance arrangement for the 1.3 trillion yuan ultra-long-term special government bonds has been officially announced. Today, the Ministry of Finance released the issuance schedule for the 2025 general government bonds and ultra-long-term special government bonds. The ultra-long-term special government bonds will be issued in 21 tranches, starting on April 24, about three weeks earlier than last year. Industry insiders noted that the pace of government bond financing this year is relatively fast. Given the increased necessity for stabilizing growth, the front-loading of special bond issuance is not surprising. Considering the pullback in external demand, there is a possibility of incremental fiscal policies being introduced in Q3, based on the annual deficit limit. The issuance of ultra-long-term special government bonds will start on April 24, earlier than last year. According to the Ministry of Finance's arrangement, the issuance of this year's ultra-long-term special government bonds will commence on April 24. On that day, a 20-year bond and a 30-year bond will be launched, both being the first tranches. Chart: 2025 Ultra-Long-Term Special Government Bond Issuance Plan (Source: Ministry of Finance website, compiled by Caixin) This year's special bonds will be issued in 21 tranches, with 6 initial tranches and 15 follow-up tranches. In terms of the issuance schedule, after starting on April 24, there will be 4 tranches issued in May, August, and September, 3 tranches in June and July, and the final tranche will be tendered on October 10. Looking at the maturities of the initial tranches, this year will see the issuance of 2 20-year bonds, 3 30-year bonds, and 1 50-year bond. The 50-year bond will be tendered on May 23. Compared to last year, the issuance of special bonds this year is slightly earlier. In 2024, the first issuance of special bonds was on May 17, and the issuance was completed by mid-November, with a relatively balanced pace throughout the months. Zhou Guannan, chief fixed income analyst at Huachuang Securities, previously noted in a research report that the 2024 ultra-long-term general government bonds clearly made way for the ultra-long-term special bonds. From the Q2 2025 government bond issuance plan, the suspension of 30-year and 50-year ultra-long-term general government bonds in May may signal the start of ultra-long-term special bond issuance. Other industry insiders mentioned that the faster pace of government bond financing this year, against the backdrop of external demand pressure and the increased necessity for stabilizing growth, makes the early issuance of special bonds unsurprising. However, the issuance pace remains similar to last year, maintaining a relatively uniform speed. This year's government bond financing is proceeding at a faster pace, with the possibility of incremental fiscal policies in Q3. The Government Work Report for this year has clearly stated that the planned issuance of ultra-long-term special government bonds for 2025 will increase from 1 trillion yuan to 1.3 trillion yuan, continuing to support the implementation of the "two major" projects and the "two new" policies. Among these, 300 billion yuan will support the expansion of consumer goods trade-ins, 200 billion yuan will be used for equipment upgrades, and the remaining 800 billion yuan will support the "two major" projects. Li Yong, chief fixed income analyst at Dongwu Securities, predicts that if the scale proportion of each maturity for the 2025 ultra-long-term special government bonds is the same as in 2024, then out of the 1.3 trillion yuan quota, 400 billion yuan will be for 20-year bonds, 700 billion yuan for 30-year bonds, and 200 billion yuan for 50-year bonds. Zhou Guannan believes that there is room for accelerating the issuance of ultra-long-term special government bonds in 2025. This year, 100 billion yuan of the 800 billion yuan special bonds for supporting the "two major" projects already have project lists, with more sufficient preparation time. The quota for supporting consumption is larger and less constrained by projects. If necessary, the issuance progress of the 2025 ultra-long-term special government bonds could be faster than in 2024. Since the beginning of this year, the financing pace of general government bonds has been relatively fast, with recent single tranche issuances exceeding 170 billion yuan. According to relevant data, 3.30 trillion yuan of government bonds were issued in Q1, achieving a net financing of 1.47 trillion yuan. As of the latest, a total of 4.45 trillion yuan of government bonds have been issued this year, with a net financing of 1.97 trillion yuan. Based on the 2025 deficit rate of 4% and a central fiscal deficit of 4.86 trillion yuan as stated in the Government Work Report, the net financing quota for government bonds this year has already exceeded 40%. Yang Yewei, chief fixed income analyst at Guosheng Securities, expects that with the issuance of ultra-long-term special government bonds and special bonds for financial institution capital injections starting in Q2, the net financing of government bonds in Q2 will exceed that of Q1, and the peak of net financing may occur in Q3. Considering the pullback in external demand, there is a possibility of incremental fiscal policies being introduced in Q3, based on the annual deficit limit. Zhou Guannan believes that if government bonds continue to be issued at the current fast pace (for example, maintaining a single tranche size of 170 billion yuan for key maturities), the net financing of government bonds in 2025 could approach 8 trillion yuan, exceeding the original annual arrangement of 6.66 trillion yuan (central fiscal deficit of 4.86 trillion yuan + 1.3 trillion yuan special bonds), with an incremental space of 1.3 trillion yuan.