Since the People’s Bank of China and the China Securities Regulatory Commission jointly announced support for the issuance of innovative tech bonds on May 7, the market has reacted with strong enthusiasm. Experts predict that the issuance of these bonds is set to expand further, potentially alleviating the issue of asset scarcity to some extent. Additionally, the proportion of long – term innovative tech bonds is likely to increase, better aligning with the investment cycles of technology enterprises.
Meeting the Demands of Technological Innovation
The latest data from the Interbank Market Dealers Association of the Bank of China shows that in the first month since the launch of innovative tech bonds (as of June 7), a total of 147 market institutions issued these bonds worth over 374.8 billion yuan. Among them, 39 financial institutions issued 223.9 billion yuan, while 108 non – financial enterprises issued 150.998 billion yuan. The Interbank Market Dealers Association specifically supported 73 non – financial enterprises in issuing 97.72 billion yuan.
Liao Zhiming, Chief Fixed Income Analyst at Huayuan Securities, noted that currently, funds raised by major banks through issuing innovative tech bonds are mainly used to provide loans in the innovation and technology sectors. For equity investment institutions, the proceeds from these bond issuances are primarily utilized for investing in private equity investment funds and directly subscribing to fund shares, offering low – cost and long – term capital support to venture capital entities.
Li Yong, Chief Fixed Income Analyst at Dongwu Securities, believes that securities firms could be key beneficiaries of the expansion of innovative tech bonds. Their diverse business capabilities and capital market expertise will play a crucial role in the new round of integration between technology and finance.
Reducing Financing Costs
“As policies related to innovative tech bonds continue to progress and be implemented, the issuance scale by financial institutions is expected to grow further,” Li Yong said. At the real – economy level, these bonds will help ease the financing difficulties of innovative enterprises. In the capital market, they will alleviate the “asset shortage” problem for medium – and long – term credit bonds, while simultaneously reducing the development constraints for innovative tech enterprises and the selection limitations for bond market investors. Li Yong also anticipates that the maturity of innovative tech bonds issued by financial institutions will gradually extend.
From the issuer’s perspective, Hao Yunlong, a researcher at China Credit Rating Co., Ltd., stated that financial institutions are likely to become the main issuers, driving the largest increase in the market. With the improvement of the policy system and market maturation, more light – asset and high – growth private tech enterprises are expected to secure development funds through the bond market’s “technology board”, optimizing the market participant structure. Moreover, the proportion of long – term innovative tech bonds may rise, better matching the investment cycles of tech enterprises and the return cycles of equity funds, thereby relieving long – term capital pressure.
For technology enterprises, leveraging policy benefits to reduce financing costs is a rational strategy. Sun Jingyuan, Head of the Corporate and Institutional Department at ChinaBond Credit Rating, said that tech firms can build core competitiveness in the bond market’s “technology board” through the synergy of “technology + market + policy”. For example, with policy – tool support, they can reasonably lower financing hurdles. By fully utilizing the policy advantages of the bond – market “technology board”, flexibly designing bond types and terms, and introducing risk – sharing mechanisms, tech enterprises can effectively reduce their financing costs.
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