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Liaoning Issues Multi-Tranche Special Local Government Bonds

Liaoning province issued special local government bonds across four tenors on the same day: 15-year notes totaling 218 million yuan at a 2.11% coupon, 30-year notes of 446 million yuan at 2.26%, and three 20-year tranches of 1.0 billion yuan, 568 million yuan and 2.5 billion yuan, all at coupons of 2.24%, 2.24% and 2.23% respectively. The 20-year 1.0 billion yuan tranche drew a marginal bid-to-cover of 76.00 times.

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AI take

The standout is the 20-year tranche's 76x marginal bid-to-cover, an extreme level that signals scarcity of long-duration provincial paper rather than a broad shift in sentiment. The spread structure matters: 30-year paper priced only about 15bp above 15-year, a flat curve that suggests investors are reaching for duration. The open question is whether such lopsided demand at the 20-year point persists in other provinces' special bond sales, which would indicate a structural bid for duration rather than a one-off.

Generated by AI for reference only.

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