China sells first 30-year special bonds at 2.2%, lowest since November 2025
Here are the salient details:
The 85-billion-yuan tranche carried a coupon slightly lower than comparable secondary-market yields at the time of the auction.
China’s 30-year treasury yield has fallen roughly 15 basis points this month after hitting a 1-1/2-year high in mid-March, supported by ample liquidity and receding inflation fears on expectations of a Middle East ceasefire.
China’s finance ministry successfully auctioned 30-year special government bonds at a 2.20% yield, the lowest since November 2025. This reflects easing inflation concerns and improved market sentiment for long-term debt. The issuance, part of Beijing’s strategy to fund national initiatives, aims to avoid liquidity shocks through staggered sales.
* “While geopolitical risks have continued to ebb and flow since late March, the market is increasingly treating ‘fighting to promote talks’ as the base case,” lifting sentiment for ultra-long bonds, analysts at Huachuang Securities said in a note.
But in the medium term, analysts at Huatai Securities flagged risks from heavier supply of government and financial bonds as well as potential volatility if the overnight repo rate rebounds.
The average rate of overnight repos in the interbank market dropped to 1.2%, the lowest since August 2023.
The bid-to-cover ratio for the 30-year special-bond tranche was 3.58 times.
Separately, the ministry auctioned 34 billion yuan of 20-year special treasuries also at 2.2% yield, with a bid-to-cover ratio of 3.73 times.
* The ministry has retained this year’s ultra-long special treasury issuance to 20-, 30- and 50-year maturities, unchanged from last year.
* The sales are being staggered from April to October to limit liquidity shocks, with the first tranche of 30-year bonds set to start trading on April 29.
* Beijing has said it will issue such bonds for several consecutive years from 2024 to underpin crucial national strategies. ($1 = 6.8371 Chinese yuan renminbi)
