Research On The Risk Of Chinese SME Private Bond

The Private bond of SME means that SME adopted a non-public manner issuance and transfer the servicing corporate bonds In a certain period in our country. SMEs have low private debt financing costs, distribution convenient, flexible use of funds, improve corporate bonds market impact and other advantages. With the rapid development of the market of The Private bond of SME, it occurs the event of Bond defaults gradually. As of December 30,2014, There are 613 shares of The Private bond of SME in Bond Market. Nominal value of 108.5 billion yuan, with an average amount of 177 million per bond, the occurrence of a material breach of a total of five private debt. This paper systematically summarizes the research results at home and abroad on corporate bonds, private equity risk, the risk of the current situation of private bonds were analyzed. The purpose of this study is to reveal the causes of the risks generated by private debt and to provide policy recommendations to prevent risks correspondingly.The papers used normative analysis and quantitative analysis methods analyze risk private bonds factors. Normative analysis method, through the literature and case studies concluded that the extent of disclosure for SMEs, the SME private placement bond liquidity, SME private placement bond credit rating system, the regulatory system of private debt, private debt and bond investor protection system risk diversification, transfer and isolation mechanisms affect SME credit risk private bonds. Quantitative analysis method, we use cross-sectional multivariate linear regression model to analyze the impact of corporate financial ability of SMEs private debt risk; use VAR model to analyze the macroeconomic impact of the overall credit risk of SMEs private placement bonds. According to the SME private debt risk factors, this paper optimize the financing structure, and enhance their financial capacity; enhancing China’s overall economic strength; improve the bond credit rating system, build efficient bond investors protection system, the establishment of appropriate regulatory approach; improve the information disclosure system, improve the private bond liquidity SME SME private debt to prevent the risk of policy recommendations.