A top-tier securities firm plans to issue 40 billion yuan of bonds, with 11 billion yuan to be used to repay its existing debts.

According to the official information of Shanghai Stock Exchange, the perpetual subordinated bonds publicly issued by CITIC Securities Co., Ltd. (hereinafter referred to as CITIC Securities) to professional investors in 2026 have recently been accepted by Shanghai Stock Exchange, with the proposed registered amount not exceeding RMB 400 billion and issued in tranches.

Through comprehensive evaluation by China United Credit Ratings, the issuer credit rating of CITIC Securities is AAA, the credit rating of this bond is AAA, with a stable rating outlook. This bond is a small public offering product, with China Merchants Securities, GF Securities, and SDIC Securities serving as the lead underwriters.

110 Billion Yuan for Debt Repayment, 290 Billion Yuan for Working Capital Supplement

The prospectus shows that after deducting relevant expenses such as issuance costs from the raised funds, RMB 110 billion of the funds is planned to be used to repay the company's corporate bonds, and RMB 290 billion is planned to be used to supplement working capital, so as to meet the capital needs of the company's debt structure adjustment and daily operation and management.

In terms of the specific bonds to be repaid, the RMB 110 billion will be used to repay two tranches of corporate bonds, namely "26 Zhongzheng S3" (RMB 80 billion, interest rate 1.47%) and "25 Zhongzheng 12" (RMB 30 billion, interest rate 1.80%). The issuer promises that the details of the corporate bonds to be repaid with this bond do not overlap with the repayment details in the previously approved registration reply.

In addition, the issuer promises that no more than 10% of the part of the raised funds used to supplement working capital will be invested in capital-consuming businesses such as margin trading and securities lending, stock pledge, and derivatives. Without affecting the normal progress of the use plan of raised funds, the issuer may conduct cash management on temporarily idle raised funds and invest in products with high safety and good liquidity, such as national debt, policy bank financial bonds, local government bonds, and exchange bond reverse repurchase.

It is worth noting that this bond is a perpetual subordinated bond with a number of special issuance terms. In terms of bond maturity, this bond takes every 5 interest-bearing years as a repricing cycle. At the end of each repricing cycle, the issuer has the right to choose to extend the bond maturity by one repricing cycle (i.e. extend for 5 years) or make full redemption.

In terms of interest rate, this bond adopts a floating rate form, with the coupon rate fixed for the first 5 interest-bearing years, and reset every 5 years thereafter. The reset rate is the current benchmark interest rate plus the initial spread plus 200 basis points.

The issuer also has the right to defer interest payment, which means that unless a mandatory interest payment event occurs, the issuer may choose to defer the current interest to the next interest payment date at each interest payment date without any restriction on the number of deferrals. However, if the issuer chooses to defer interest payment, it may not distribute dividends to ordinary shareholders or reduce registered capital during the deferral period.

Financial data shows that as of the end of March 2026, the total assets of CITIC Securities were about RMB 2.24 trillion, and the total liabilities were about RMB 1.90 trillion. The company's highly liquid assets such as monetary funds (excluding customer fund deposits) and trading financial assets totaled more than RMB 1 trillion.

Brokerages See Surging Enthusiasm for Bond Issuance This Year

The enthusiasm of brokerages for bond issuance continues to rise. According to Wind data, as of the press release on August 18, 74 brokerages have issued a total of more than RMB 1.5 trillion of bonds in the Chinese mainland since 2026, compared with RMB 949.8 billion in the same period last year.

Among leading brokerages, Guotai Haitong ranks first with a bond issuance scale of RMB 1362 billion within the year, and CITIC Securities ranks second with RMB 1303 billion. In addition, Huatai Securities, China Galaxy Securities, and CITIC Construction Investment Securities all have bond issuance scales exceeding RMB 900 billion. GF Securities, China Merchants Securities, Shenwan Hongyuan, and Guosen Securities all have bond issuance scales exceeding RMB 500 billion.

Recently, in addition to CITIC Securities, brokerages including Guotai Haitong, Jianghai Securities, Caida Securities, and China Development Bank Securities have also submitted bond prospectuses to Shanghai Stock Exchange, all of which have been accepted by the exchange.

Wang Zejun, analyst at China Post Securities, pointed out that the surge in bond issuance by brokerages is not only for capital replenishment, but also for strategic capital support under the wave of M&A integration. Leading institutions have significantly featured pre-arranging M&A capital through bond financing. Regulators encourage industry M&A and restructuring, and the current integration of the brokerage industry has entered a new stage of dual drive of "regulation + market": leading brokerages need to raise funds through bond issuance to provide financial support for subsequent acquisition of small and medium-sized brokerages and integration of industry resources; new leading institutions after integration (such as Guotai Haitong, Guolian Minsheng) need to further supplement net capital to support the business expansion after integration as their business scale expands, forming a chain of "integration → bond issuance → re-expansion".

The above analyst said that the current market interest rate is at a low level in recent years, and the large-scale "borrowing new to repay old" of brokerages is not a passive rollover, but a strategic operation to actively reduce the overall debt cost: by issuing new low-interest bonds (the arithmetic average interest rate in the first half of 2026 is about 1.65%) to replace old high-cost bonds (the arithmetic average interest rate from 2022 to 2023 is about 2.47% - 2.61%), it can directly reduce the overall financial expenses of the industry and increase net profit, which is the "bond issuance dividend" for brokerages.

The views in this article are for reference only and do not constitute investment advice. Investment is risky, and caution is advised when entering the market.

This article is from the WeChat Official Account "China News Finance" (ID: jwview), written by Luo Kun, edited by Li Xiaoxuan, with chief editors Xue Yufei and Chang Tao, and published with authorization from 36Kr.