Research On Credit Risk Analysis And Hedge Method Of Project Finance

Project Finance,as a new financing tool,was emerged in the international capital markets in 1970s and has developed into an efficient wide-used financing method in infrastructure's construction. In recent year, with the deepening of China's market economy project financing, the advanced mode financing rises in large-scale domestic contruction project quietly. But long-time negotiation,a wide variety of involved parties and complicated structure lead it to being exposed to many risks. The effective identification, analysis and assessment of credit risk plays a very important role in the risk management procedure. It facilitate the further avoidance and management of credit risk, in order to guarantee the loan used the supposed way and payable on time in future.Based on reading and referring the literature which involves the Project Finance Risk Management widely, this paper decides to adopt a theoretical and case study combined research method, and the writer further researched the application of risk identification, risk analysis, risk assessment and risk avoidance used in the finance process of Shandong Rizhao Pulp & Paper Co.,Ltd, and also details in the risk management and fund security under the update economic situation. The full paper is divided into six chapters. Chapter I points out the background of the subjects, the status quo of domestic and overseas research, research methods used in this article, and possible innovations. Chapter II draws an conclusion on the Project Finance Risk Management theory and lay the foundation for further study. Chapter III has a overview of the overall case, identifies the risk involved in the project. Thanks to the finance risk analysis in Chapter IV after assessing analysising the financial report of the case, we have a clearer view over the risk involved in Project Finance. Chapter V mainly pointed out the ways to avoid/hedge the risk identified above, and suggested the enterprised and banks hedge the risk better in such situation. Chapter VI: conclusion and vision refer to the research accomplishment/results and places to be improved, and the author also describe his vision over the development of Project Finance Risk Management.The primitive analysis and research above has pointed out the ways to identify, analysis, evaluate and hedge the Credit Risk in some sense. The author hope the basic research can inspire others' Project Finance Risk Management and prove to be helpful in the future study.