China's first batch of 36 sci-tech innovation bonds, totaling 21 billion yuan (2.9 billion U.S. dollars), was launched on Friday to expand financing channels for companies engaging in integrated circuits, new materials, and intelligent computing.
The bonds involve 22 science and technology firms and 14 equity investment institutions, covering projects across 10 provincial-level regions, including Beijing, Shanghai, and Guangdong.
The rapid rollout, just two days after the People's Bank of China (PBOC) and the China Securities Regulatory Commission announced the policy, highlights the government's swift response to support sci-tech innovation, offering flexible bond terms and installment options for issuers.
The bonds were officially introduced at a launch and roadshow in Beijing, run by the National Association of Financial Market Institutional Investors (NAFMII) in partnership with the Beijing Financial Assets Exchange (BFE), marking their formal debut in the interbank bond market.
Under the new policy, issuers have the flexibility to structure bond terms creatively, with credit rating agencies encouraged to move away from traditional asset-based models in favor of tailored approaches. To enhance risk management, institutions will offer credit protection tools, guarantees, and other services, supporting both bond issuance and investment transactions.
"Sci-tech innovation bonds are financing tools designed specifically for the science and technology sector, with advantages of precision, flexible terms, and controllable costs. By providing more efficient, convenient, and cost-effective incremental funding, the issuance of these bonds is bound to attract more investment to support private enterprises in driving their sci-tech innovation, thereby fostering the development of new quality productive forces," said Cao Yuanyuan, deputy director of the financial markets department of the central bank.
Industry experts note that bond financing is more cost-effective than traditional bank loans, particularly for science and technology startups.
"As an equity investment institution, our previous financing channels were quite limited, relying mainly on private placements and equity financing. This time I believe the policy introduced by the People's Bank of China has actually opened up a new bond financing tool for investment, which is a very good thing for our industry," said Chen Wei, chairperson of Oriental Fortune Capital in Shenzhen.
"Given that the overall interest rate remains relatively low, being able to acquire funding at a lower cost than traditional bank loans is a very good source and replenishment of capital for science and technology companies," said Sun Jingyuan, head of corporate and institutional department at China Bond Rating.
Experts believe the issuance of long-term sci-tech innovation bonds will better align with the funding needs of the science and technology sector, complementing other financing channels such as bank loans and public market offerings.
China's first batch of 36 sci-tech innovation bonds launched
