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faced with the pressure of debt repayment, securities firms are taking turns to issue bonds to "replenish their blood."

on the evening of september 23, two listed securities firms, western securities and changjiang securities, successively issued corporate bond fundraising announcements. the two securities firms planned to issue bonds no more than 800 million yuan and 2 billion yuan respectively.

china securities journal reporters noticed that from the beginning of this year to september 23, listed securities companies issued a total of 303 bonds with a total issuance amount of 567.3 billion yuan. among them, 20 listed securities companies issued bonds exceeding 10 billion yuan. however, compared with the total issuance amount of 869.8 billion yuan in the same period last year, there was a decrease.

industry analysts believe that in the context of interest rate cuts, bond financing costs are relatively lower than other financing methods. at the same time, in the market environment where regulators are prudent in refinancing, financing methods such as additional issuance and rights issue are not easy to implement. the financing method of issuing bonds is safer and more stable, with a simple process, which is conducive to improving the capital utilization efficiency of securities companies.

20 listed securities firms issued bonds worth over 10 billion

brokerage firms are in the process of “replenishing their blood”.

on september 23, changjiang securities and western securities respectively issued announcements on the public issuance of corporate bonds to professional investors in 2024.

among them, changjiang securities plans to issue bonds with a total face value of no more than 2 billion yuan, with a term of 3 years; the total amount of bonds issued by western securities this time will not exceed 800 million yuan, with a term of 3 years, and the coupon interest rate inquiry range of the bonds is 1.6%-2.6%.

in fact, the bond financing by changjiang securities and western securities is just a microcosm of securities companies choosing bond issuance as a mainstream financing method.

according to wind data statistics, from the beginning of this year to september 23, 45 listed securities companies issued a total of 303 bonds with a total issuance amount of 567.3 billion yuan.

among them, 20 listed securities companies have issued bonds exceeding 10 billion yuan since the beginning of this year, and 8 listed securities companies have issued bonds exceeding 20 billion yuan. among them, the top five issuers are: china merchants securities, guosen securities, china galaxy securities, gf securities and cicc securities, with issuance amounts of 67.5 billion yuan, 44.2 billion yuan, 40.6 billion yuan, 38.9 billion yuan and 37.2 billion yuan respectively.

in terms of the purpose of raising funds, securities firms issue bonds mainly to repay debts that are about to mature, increase working capital, maintain daily operations of the company, and support business expansion and development. faced with the pressure of repaying debts, many securities firms have adopted the strategy of "borrowing new to repay old".

take western securities as an example. the brokerage stated in the bond prospectus that the plan for the use of the raised funds is mainly to use no more than 800 million yuan to repay matured interest-bearing debts after deducting the issuance expenses. among them, western securities' "23 western 06" and "24 western securities cp005" will mature on october 15, 2024 and november 19, 2024, respectively. the total balance of the two bonds is 2.1 billion yuan. changjiang securities is similar, and the main investment direction of the raised bonds is also "borrowing new to repay old".

fixed increase and ipo "cold reception"

industry insiders believe that securities firms choose issuing bonds as their main financing method after comprehensively considering the market environment and regulatory policy orientation.

"securities firms choose to issue bonds mainly because of the current market environment. refinancing in the secondary market is not easy and stock market prices are unstable. refinancing through private placement may put pressure on their stock prices, while issuing bonds will basically have no direct impact," a senior researcher at a securities firm told securities china reporters.

according to wind statistics, there has been basically no additional issuance or rights issue since the beginning of this year, and no rights issue plan has been released. only guolian securities, which acquired minsheng securities, planned to issue additional shares to raise 2 billion yuan, but eventually terminated and withdrew the plan.

in comparison, in 2022, citic securities, orient securities and industrial securities all had rights issue plans worth tens of billions of yuan, and great wall securities and guojin securities both completed the private placement of billions of yuan; in 2023, only two securities companies, guangdong development securities and guohai securities, completed the private placement of "shrinking". among them, guangdong development securities' financing scale was compressed from the initial 15 billion yuan to 426 million yuan, and finally raised only 324 million yuan, which was 100 million less than the compressed scale, while guohai securities finally raised 3.192 billion yuan, which was also significantly reduced from the initial total amount of no more than 8.5 billion yuan.

at the same time, in june this year, caida securities announced that its plan for a fixed increase in capital was automatically invalidated due to expiration of its validity period. as early as the end of 2022, the second year of caida securities' a-share listing, the company issued a plan for a 5 billion yuan fixed increase. in the end, caida securities failed to successfully raise funds to "replenish its blood." similarly, zhejiang securities' 8 billion yuan fixed increase in capital also failed in march this year due to the automatic expiration of the resolution.

the above-mentioned securities firm researcher told the china securities journal reporter that "regulators are more cautious about securities firms' financing behavior. they have repeatedly mentioned that securities firms should improve the efficiency of fund use, prudently carry out high-capital-consuming businesses, and take the path of capital-saving and high-quality development."

in addition to the cold reception of securities firms' private placements and rights issues, the ipo path for unlisted securities firms has also slowed down significantly. after the implementation of the comprehensive registration system, almost no securities firm has succeeded in ipo.

wind data shows that there was a wave of listing boom among securities companies from 2018 to 2020, during which an average of 4 to 5 securities companies entered the capital market each year, including leading companies such as cicc and cicc.

specifically, in 2018, there were five newly listed securities firms, including huaxi securities and tianfeng securities, and in 2019, hualin securities and hongta securities were listed. in 2020, the listing of securities firms ushered in a small climax, with four securities firms, including boc securities, zhongtai securities, guolian securities and cicc, joining the a-share market.

subsequently, the pace of securities firm ipos slowed down significantly. in 2021 and 2022, only one securities firm successfully went public, namely caida securities and capital securities.

in 2023, only cinda securities completed its listing before the full registration system was implemented, and since then, no other brokerage firms have made progress in the listing process. so far, there are five brokerage firms in the shanghai and shenzhen stock exchanges, including caixin securities, hualong securities, bohai securities, kaiyuan securities and dongguan securities, that are in the process of planning ipos.

in may this year, the china securities regulatory commission issued the "decision on amending the regulations on strengthening the supervision of listed securities companies", pointing out that securities companies' initial public offering of securities, listing and refinancing should be based on shareholder returns and value creation capabilities, their own operating conditions, market development strategies, etc., to reasonably determine the scale and timing of financing, strictly regulate the use of funds, focus on their main responsibilities and businesses, prudently carry out high-capital-consuming businesses, and improve the efficiency of fund use.

therefore, in contrast, even the mainstream financing method chosen by securities companies, issuing bonds, has declined this year in response to the policy to focus on its main responsibilities and businesses.

according to wind data, from the beginning of this year to september 23, listed securities companies issued a total of 567.3 billion yuan in bonds and issued a total of 303 bonds, which was a significant decrease compared with 869.8 billion yuan and 429 bonds in the same period last year. the scale of bond issuance decreased by 35% year-on-year.