A Case Study On Credit Risk Of Private Placement Bond Issued On Chinese Quasi-government Platform

This article study on the credit risk of the private placement corporation bond that has the most slack issuing policy since the issuing of the new regulation. The issuer of the private placement corporation bonds can be attributed to quaci-government platform company and the industrial company. Now the credit risk source of the private placement corporation bonds mainly comes from the quaci-government platform company as the issuer. The study on the credit risk of the private placement corporation bonds issued by the quasi-government platform company is based on the company’s characteristics but not by the way of quantitative analysis. With the analysis of the internal and external risk of the company, we come to the conclusion that the sources of the credit risk of the quasi-government platform company issuing private placement corporation bonds, mainly comes from the company’s weak profitability and the strong dependency to the government. The article also specially provide the third-party supervision and the future industrial transformation as the short-term and long-term bond repayment guarantee mechanism, so that we can have the solution to resolve the possible credit risk when issuing quasi-government platform corporation private placement bonds as well as guaranteeing the bond repayment. The conclusion of this article can not only provide the risk warning and bond repayment methods to the issuer of the private placement company, but also offer some policy support and theory reference for the regulators to regulate the local government debt identification and the transformation of the financing platform company.