TREE NEWS update: Liaoning province issued a 30-year special local bond of 26.450 billion yuan at a coupon of 2.2000%, with a bid-to-cover marginal ratio of 8.23 times against an expected 2.19. The same auction included 10-, 15- and 20-year tranches totaling 2.230 billion, 8.920 billion and 38.400 billion yuan at 1.6500%, 1.9500% and 2.1400% respectively. The 20-year tranche drew a marginal ratio of 3.56 times versus a 2.13 expectation.
Liaoning Issues 30-Year Special Local Bond at 2.2000%, 26.45B Yuan
The demand signal here is the story, not the headline coupon. The 30-year tranche pricing a hair above expectation while still drawing a marginal bid-to-cover of 8.23 times suggests strong appetite for long-duration provincial paper despite the modest yield pickup over the 20-year. That the 20-year tranche also cleared well above expectation points to broad-based demand across the curve rather than a single-point anomaly. Whether this level of oversubscription holds as more provincial supply comes to market is the open question.
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