Rating Appraisement Of Common Bonds With Fuzzy Membership Functions

In recent years more and more enterprises enter bond market to be financed through issuance of bonds, whereupon enterprise bonds have an increasing share in bond market year by year. Due to the universal information asymmetry between investors and bond originators, it tends to be very difficult for investors to obtain adequate information to draw correct conclusions about bond investment risk (while the cost of risk evaluation is expensive), leading to frequent enterprise bond default. Thus investors are exposed to credit risk in bonds purchase. Therefore it calls for fair and objective evaluation on the principal and interest repayment reliability of enterprise bonds and the swiftest delivery of the situation of bond originators' finance and credit to investors.This paper intends to conduct an analysis of the principal and interest repayment reliability and risk of common enterprise bonds. Besides internal factors inside enterprise, including trade, project and finance, enterprise-related external factors under China's realities are taken into consideration. Through the establishment of common bonds' finance and credit evaluation index system, level analysis is employed and vague subordinate function is introduced to grade enterprise's debt and credit into there levels: common, good and excellent. It aims to make the evaluation of enterprise bonds' risk more objective and justifiable and the result straighter so as to provide reference for enterprise bonds grading.