Research On Factors Affecting Issuance Spreads Of SME Private Bonds In Jiangsu Province

The SME private bond is a very important financial product to solve the financing difficulty of small and medium enterprises. Because of its short time to be listed, the SME private bond lack a unified, regular market standard in the pricing mechanism of bond’s issuing market. Spread is an important factor to determine the pricing of bonds.How to evaluate the spread between corporate bond and risk-free bond correctly, as well as their corresponding influence factors and to price for the SME private bond reasonably have drawn more and more attentions of scholars and financial professionals. Because the SME private bonds have been listed for only two years, domestic scholars mainly focus on the study of its qualitative research and the quantitative research that aims at one particular private bond only taken by some scholars. Additionally, there is a typical meaning to study the SME private bond issuance in Jiangsu province due to its biggest issuing scale throughout the country. Therefore, in such circumstances, this paper attempts to analyze the inf luence factors of spread in issuing SME private bonds in Jiangsu province.This article first analysis the related theory and determine the spread. The spread of this study mainly includes the credit risk premium and the liquidity risk premium of bond. And found 2/3 of the funds that the SME private bond raised had inflows to local state-owned enterprises. Based on the SME private bond released from June in 2012 to in August 2014 in Jiangsu province, this paper analyzes the overall situation of the SME private bond from the perspectives of the issuing scale, the coupon rate, the nature of the enterprise and industry. And then his paper identify the macro factors, bond characteristic factors, industry factors and geographic factors that influence the spread in issuing SME private bond in Jiangsu province by analyzing the panel data of this market. What follows is determining whether the impact of these factors discussed above is obvious in empirical test by the method of S tepwise Regression. To conclude, what obviously affect the spread in issuing SME pr ivate bond in Jiangsu province are these six factors:corporate bond index of The Shanghai Stock Exchange,GDP in the quarter year-on-year growth rate, the nature of the company,guarantee,credit rating information and region.