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mr. gao encountered repayment problems after investing in municipal bonds


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the promised repayment period for the project has arrived, but the liquidity problem has put mr. gao in a difficult situation. although the authorities have stated that they will repay in proportion, the amount of loss and the solution are still controversial.

urban investment bond projects are a common phenomenon in the investment field. they usually involve local infrastructure construction or public welfare projects. many investors are attracted to them, especially for some bonds that local governments promise to repay. however, the risks of urban investment bond projects also need to be carefully considered.

why are municipal bonds risky?

the nature of municipal investment bond projects is profit-oriented investment, which is different from the nature of industrial bonds. industrial bonds often lead to substantial defaults due to funding problems or technical defaults, which puts investors at greater risk.

the risks of municipal bond projects mainly manifest themselves in two aspects: technical default and substantive default.

first, technical default refers to the failure of the local government platform to raise funds for repayment when the product expires, resulting in overdue or delayed repayment. although the official promise is to complete the repayment within a certain period, the actual situation may be different. therefore, the probability of technical default is small, but there is still risk.

secondly, a material default refers to a government platform that is short of funds when fulfilling its debt obligations, and may even default due to financial pressure, resulting in losses for investors.

investing in municipal bonds requires careful selection

mr. gao's experience reminds investors that they should be well aware of the relevant risks when choosing investment projects, especially when it comes to cross-border businesses such as overseas express delivery services, they need to act with caution.

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