Following the rare zero issuance in the first quarter, the issuance of bank Eryong bonds has been greatly accelerated since the second quarter, with a total issuance scale of over trillion yuan. At the same time, the market is clearly divided, the state-owned giants are the absolute main issuers, and the pace of issuance by small and medium-sized banks is slowing down. Behind the intensive issuance of perpetual bonds by banks is downward pressure on capital adequacy ratios. Although the pace of bond financing for small and medium-sized banks is slowing down, they are also actively exploring diversified “blood supplementation” channels. Innovative tools such as convertible debt-for-equity swaps and local government special bond capital injections are being implemented at an accelerated pace. Industry insiders believe that the essence of the division of eryong bond issuers is the dual result of market credit stratification and restructuring of regulatory logic. This not only reflects the maturity of the market risk pricing mechanism, but also highlights the urgency of the transformation of small and medium-sized banks. If small and medium-sized banks want to enhance their capacity for sustainable development, in addition to increasing capital and “supplementing blood,” they should also focus on “improving quality.”

Following the rare zero issuance in the first quarter, the issuance of bank Eryong bonds has been greatly accelerated since the second quarter, with a total issuance scale of over trillion yuan. At the same time, the market is clearly divided, the state-owned giants are the absolute main issuers, and the pace of issuance by small and medium-sized banks is slowing down. Behind the intensive issuance of perpetual bonds by banks is downward pressure on capital adequacy ratios. Although the pace of bond financing for small and medium-sized banks is slowing down, they are also actively exploring diversified “blood supplementation” channels. Innovative tools such as convertible debt-for-equity swaps and local government special bond capital injections are being implemented at an accelerated pace. Industry insiders believe that the essence of the division of eryong bond issuers is the dual result of market credit stratification and restructuring of regulatory logic. This not only reflects the maturity of the market risk pricing mechanism, but also highlights the urgency of the transformation of small and medium-sized banks. If small and medium-sized banks want to enhance their capacity for sustainable development, in addition to increasing capital and “supplementing blood,” they should also focus on “improving quality.”