Guotai Junan: The pace of local new special bond issuance is relatively slow; special bond usage is expected to be more flexible in the fourth quarter.

Guotai Haitong Securities research report states that the pace of new local government special bond issuance in 2026 is relatively slow, possibly due to insufficient project reserves. It is expected that in the fourth quarter, the use of special bonds may become more flexible to support debt resolution, with supply increasing but duration pressure weakening. As of September 11, the cumulative issuance of new special bonds for the year reached 3.03 trillion yuan, accounting for 68.9% of the annual new special bond quota; based on the issuance plan, the progress by the end of September is projected to reach 76.4%. Judging from the issuance pace of recent years, by the end of September, approximately 90% of the annual quota is typically completed, and by the end of October, special bonds are basically fully issued.