What is the concept of national debt? What does the national debt service ratio mean?

Treasury bonds are bonds issued by the state. They are a type of government bond issued by the central government to raise fiscal funds. They are debt certificates issued by the central government to investors, promising to pay interest within a certain period of time and repay the principal upon maturity. In summary, we know that treasury bonds can be used as collateral for mortgage loans, but the specific process still requires consulting the bank staff. Let's learn more about it! I hope it will be useful to you.

Contents of this article

1. What is the concept of national debt?

2. What does the national debt service ratio mean?

3. Can government bonds be used as collateral for mortgage loans?

4. What are the trading rules for listed government bonds?

What is the concept of national debt?

Treasury bonds are bonds issued by the state. They are a type of government bond issued by the central government to raise fiscal funds. They are debt certificates issued by the central government to investors, promising to pay interest within a certain period of time and repay the principal upon maturity. Treasury bonds, also known as national bonds, have the highest credit rating and are recognized as the safest investment tool because the issuer of treasury bonds is the state.

What is the national debt service ratio?

The national debt service ratio refers to the ratio of the principal and interest payments of national debt in a certain year to the fiscal revenue of that year. It can also be said to be the proportion of the fiscal revenue of that year used to repay debts. It is an important indicator to measure the country's own debt repayment ability.

The formula for calculating the national debt repayment ratio is: National debt repayment ratio = (national debt principal and interest payment amount / fiscal revenue of the year) × 100%.

The lower the national debt repayment ratio, the higher the country's fiscal debt repayment capacity; the higher the national debt repayment ratio, the lower the country's fiscal debt repayment capacity.

Can national debt be used as collateral for mortgage loans?

1. Government bonds can be used as collateral for mortgage loans.

2. Because it is clearly stipulated that any fixed asset that has value and use value in accordance with the law, as well as materials or property that can be circulated and transferred, can be used as collateral to apply for a loan. National debt falls into this category.

3. And not just government bonds, any securities, including bills, stocks, real estate, etc., can be used as collateral.

4. Banks also provide special treasury bond pledge loan services, which is a loan service where the borrower pledges unexpired treasury bonds, obtains a loan from the bank, and repays the principal and interest of the loan in one lump sum when the loan is due. However, it should be noted that if you want to apply for a treasury bond pledge loan, the treasury bonds used as collateral must usually be certificated treasury bonds.

5. As for the amount of the treasury bond pledge loan, the general starting point is 5,000 yuan, and the maximum can reach 90% of the bond pledge value; the maximum loan term is no more than one year or the treasury bond maturity date; the loan interest rate is based on the loan interest rate of the same level during the same period stipulated by the central bank.

What are the trading rules for listed government bonds?

1. Trading method: The trading method adopts T0 trading rules, and the spot trading of treasury bonds allows for turnaround trading. That is, bonds bought on the same day can be sold on the same day, and bonds sold on the same day can be bought on the same day.

2. Quotation unit: The quotation unit is 100 yuan per bond, and the price refers to the price of each 100 yuan face value bond. The minimum reporting quantity unit for bond sales is 1 bond, and the minimum reporting quantity unit for bond purchases and bond repurchase sales is 10 bonds.

3. Declaration and matching method: After the official implementation of treasury bond net price trading, the net price declaration and net price matching transaction method will be implemented, and the sum of the transaction price and the accrued interest amount will be used as the settlement price.

4. Price declaration limit: After the first day of listing, the effective range of the declared price for each buying and selling auction is RMB 5 above and below the most recent transaction price.

5. The trading time and trading principles are the same as A shares, and there is no limit on the rise and fall. In addition, the minimum unit of change in the bond price is 0.01 yuan. It should be noted that investors must take the bearer bonds to the designated securities dealer for custody procedures, and then trade at the designated securities dealer.