| With the continuing development of socialist market economy in China, the issuance of corporate bonds for the urban construction and investment has been played very important roles, and will be one of the key players in the urban economic development of our country. As one of the important fund raising and investment financial platforms for the local economy, the corporates raise money by issuing bonds and take some advantages. First, they invest the money to where the money comes from and, in turn, promote and stimulate the local economy by investing in the infrastructure construction. As the result, the productivity, living condition, and environment can be improved a lot in the urban areas. Second, the company who issues the bonds would like also reconstruct the company management and financial structure in order to raise more money, lower the financial risk. This has contributed much more to the development and improvement of bonds market. On the other hand, there exist some problems that cannot be neglected. First of all, there is financial risk for the local government who raises large amount of money and falls in deep debt. Second, the crisis of advance in debt for the two different governments, before and after election, will influence the sustainable development of local economy since the debt could not be paid back totally by former government and has to be paid off by the follower. No matter it is government bonds or urban investment bonds, the situation of advance in debt for the government would also be a risk for the bank because of the possibility that the bank could not recover the loans. In addition, the urban investment bonds could be used by some officials to fulfill a lot of performance engineering projects which cost a lot of money, labor, material, and energy and other social resources. This can be done by wrong decision made by some officials who are not supervised and observed by the public. In this research, the project of the issuance of corporate bonds for Jiaozuo Urban Construction and Investment (Holding) Co. Limited was studied and analyzed systematically in details by applying economic and financial theory and methodology. An applicable mode for issuing urban investment bands and a methodology of risk aversion were proposed in order that the investment bonds serve the local economy much better. This article focus on the key points of application purposes of raising money for the issue bonds, the analysis of debt paying ability for the issue bonds, the estimation of credit rating, the project risk and countermeasures.This article performs specific analysis on the Jiao Zuo Urban Construction and Investment (Holding) Co. Limited on their bond investment project, utilizing related theory and methodology, this project undergoes a detailed systematic analytical study. This article illustrates the city’s conduct on bond investment and provides analysis on the current status of bond investment in other countries as well as the background of bond investment in China. This article illustrates the detailed operation and the significance of the bond invest project of Jiao Zuo Urban Construction and Investment (Holding) Co. Limited, including analysis of its operation environment which consists of the construction and development of the road network in the Jiao Zuo city western industrial area. This emphasis of this article is the analysis of the bond investment project, including approaching the solutions to its major problems through city’s financial, industrial, corporation management, and government support; analysis of the bond issuer’s debt paying ability through the financial and non-financial regulations; analysis of the distribution, risk management and strategies of bond issuers; as well as the accounts receivables guaranteed by the pledge and the guarantor. Through the above analysis, one can explore the distribution and risk management of an expandable city bond investment project to improve the development of a financial district. |
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