(1) general situation of bond issuance of water conservancy enterprises
there are a large number of water utilities, low industrial concentration and small single size of enterprises. due to the high threshold of bond issuance, the number of water utilities enterprises issuing bonds is small. in 2017 and from january to march 2018, there were six new bond issuing enterprises, and eight water issuing enterprises withdrew from the bond market in the same period. duration as of the end of march 2018, open market bond issuers involved in water sector in the sample total 53, the local water companies accounted for 84.91%, at the same time, involved in water supply and drainage business enterprises accounted for 74%.
as of the end of march 2018, the total bond balance of the 174 issues of the sample enterprise bonds was 119.122 billion yuan. in terms of the types of bonds, medium-term notes and corporate bonds accounted for 34.89% and 40.91% respectively. in terms of debt repayment terms, it will peak at about 26.5 billion yuan in 2021.
(2) distribution and adjustment of credit ratings of water utilities enterprises
the credit ratings of 53 issuers are mainly distributed in aa, aa and aaa, accounting for 43.40%, 33.96% and 15.09% respectively. among them, aa water enterprises have the largest proportion of existing bonds. to good companies with good development environment and a stable operating conditions, samples of 53 enterprises since 2017, a total of three main credit rating has changed, all levels rise, huaihua city water industry investment corporation, beikong water (china) investment co., ltd. and wenzhou utilities investment group co., ltd.
(3) the amount of bond issuance
under the background of strong financial supervision and economic deleveraging, the volume of water sector issuance in 2017 dropped sharply compared with the same period last year
in 2017, there were 23 issuers of bonds issued by the sample water utilities, 16 less than the previous year, and 55 issues of bonds were issued in total. the total amount of issuance reached 39.085 billion yuan, down 33.5 percent year on year, with relatively concentrated issuance time in the second half of 2017. from january to march 2018, a total of 11 water utilities issued bonds, with a total issuance volume of 16 issues and 10.75 billion yuan. the number and scale of issuance were about twice that of the same period last year. on the whole, the amount and scale of debt issued by water companies in 2017 dropped significantly from the previous year. the number and scale of water utilities increased significantly in the first quarter of 2018 compared with the same period last year.
aa enterprise issuance of total issuance or so commonly, aaa enterprise new issuance cuts from the debt compared to the same subject level, in 2017, 23 issue of credit rating is still mainly aa (11), aaa grade aa (7) and (5). issuance, aaa level enterprise issue bonds sharply decreased by 71.67%, compared to the same level of aa water companies to issue bonds, the largest little change on the previous year, a total of 17 issue of bonds, accounts for about 47% of the water industry enterprise issuance for the whole year; the issuance period of aa level water utilities is relatively high, accounting for 56.31%, but the issuance scale is limited compared with the same period last year. from january to march 2018, aa and aa subjects issued more bonds, accounting for about 90% of the issuance scale. overall look, compared to other levels, aaa level water enterprise financing way more, in the financial environment of strong regulation, more sensitive changes in the cost of debt, debt financing cost rising in 2017 cases, issuance has fallen sharply; the issuance scale of aa and aa level water utilities has little change compared with the same period last year, and the number of aa issuance period has decreased greatly.
(4) the issuance method, term and type of bonds of water conservancy enterprises
public offering issuance of sharp decline, ticket issuance in the highest proportion, the overall debt slightly shortened from distribution, water companies mainly public offering issued in 2017, offering to release quantity and size are accounted for about 70%, issued by the regulatory policy tightening public offering issuance fell 44.38% year on year, a private placement issuance year-on-year growth of 14.05%. from january to march 2018, the number and scale of public offering both increased year on year, accounting for 31.58% and 34.00% respectively in 2017.
from the perspective of issuing varieties, the issuance scale of medium-term notes in 2017 was relatively high, with a year-on-year growth of 47.38%, while the other types were all reduced. among them, 19 issues were issued (super) short, and the issuance scale decreased by 54.08% year on year. corporate bonds (including public offerings and private equity) have 16 issues, with issuance down 54.47 per cent year on year. the share of new debt issued in 2017 will rise, to about 45 per cent.
water companies from issuing period, 2017 new bonds within time limit for 1 year and, five -, and three-year is given priority to, it has accounted for 25.45%, 34.55% and 25.45% respectively, the corresponding issuance accounted for 11.00%, 40.90% and 33.00%, the average bond period of 3.17 years, shortened from 3.44 years in 2016. from january to march 2018, the duration of new bonds issued by water utilities is mainly within 1 year (accounting for 31.63% of the total), and the number and scale of new bonds issued are about twice that of january to march 2017.
(5) the interest rate of issuing bonds of water conservancy enterprises and the overall interest rate of issuing bonds with interest rate spreads
water companies, as well as in the first quarter of 2018, 2017 new bonds 55 period, to adjust some of the sample data, a total of 49 samples, the aa level in the short term (one year and within the time limit) 10, medium and long term (more than one year) 22 aa level, aa long-term level 9, long-term aaa level 8 period.
as can be seen from the sample issuing rate, the interest rate of bonds of the same grade showed an increasing trend from 2017 to the first quarter of 2018, which was in line with the macro background such as tight market funds. in the same period, the higher the principal credit level, the lower the issuing interest rate. in addition, for aa level of short-term and long-term bonds, in the third quarter of 2017 issued short-term debt issuance of long-term interest rates higher than the same period interest rate, is related to aa short-term bond issuers caused by factors such as market recognition and the nature of the enterprise.
compared to water companies long-term interest rates, the industry long-term interest rate the lower the level of performance for the same period, the high interest rates, with the level of interest rates during the period of 2017 to 2018 1 quarter trend to increase, etc. specifically, the long-term water enterprise interest rate of aa is higher than the industry-wide interest rate in the fourth quarter of 2017, but lower than the industry-wide level in the first quarter of 2018. aaa water enterprise interest rate has been lower than the industry-wide level since the third quarter of 2017.
in 2017 by the financial institutions to leverage, tighter monetary policy under the influence of the macro environment, between banks across the fixed-rate bond yields rise, 2017 samples of bond spreads a slight tightening trend on the whole, aa level long-term bond spreads in the 3 quarter of 2017 lower than the same level of short-term interest rate differentials is due to factors such as recognition and the nature of the enterprise bond market. the spread of aa grade medium - and long-term bonds in the fourth quarter of 2017 is caused by such factors as the issuance variety and market recognition. the spread over triple-a rated medium - and long-term bonds narrowed sharply in the third quarter of 2017, driven by high recognition in the bond market. in the first quarter of 2018, under the influence of strong financial supervision, the financing environment of enterprises is becoming tighter, and the bond spreads at all levels are expanding compared with the end of 2017.
from 2017 to the first quarter of 2018, medium - and long-term interest rate differentials at all levels of the industry are expanding to varying degrees. the medium - and long-term interest rate of aa water enterprises is significantly higher than that of the whole industry in 2017, and the interest rate of the first quarter of 2018 is significantly lower than that of the whole industry, which is caused by such factors as issuing varieties. aa medium - and long-term water enterprises' interest rate spreads are lower than the industry-wide level in each period. aaa long - term spread has been lower than the industry level since the third quarter of 2017. in general, since 2017, the long-term interest rate spread of aa and above water utilities has been slightly lower than that of the whole industry, and the market recognition is relatively high.
