The Analysis Of Factors That Affect The Financing Choice Of Private Placement Bonds Of Companies In China

In 2012, China's economic development goal is to prevent inflation, maintain steady growth, but also promote the development of people's livelihood. To achieve multiple macroeconomic objectives, the direct requirement is to expand the scale of social financing. The best measure for this robust growth model is the expand of the scale of debt financing not the credit growth. The key of the financing requirements is the development of the bond market. And it is also in response to the policy. Compared with other means of financing, debt financing instruments have high information disclosure requirements, high degree of specialization operation of practitioners and institutions. The whole bond market is much more transparent, so it is more conducive to attract and gather a large number of investors and financial demanders. The launch of the private debt, is the specific measures to implement the policy of economic development, is conducive to further develop the debt capital market for supporting the strategic adjustments of the economic structure, and to provide more convenient and flexible financing services for many high-tech industries.Compared with the overseas private bond market, China's private debt market, no matter in size,kind, regulation or the system development level is far lost compared the overseas. The launch of the measures of the new company issued bonds in 2015 lead Chinese private debt market to a new level. Non-public Corporation bonds expand the private debt issuer's range and attract more investors. Only one year in 2015, private bonds' issuing scale growth is fairly the same with public corporation bonds. Though in 2013 and 2014, the public offering of debt had negative growth, private placement bonds remained positive growth. The data tells that private placement bonds have more energy than public corporate bonds.Why in the same conditions, the development of private bonds is better than the public offering bonds? Why there are more and more enterprises choose to is-sue private debt instead of public offerings? This paper in terms of the theoretical hypothesis and empirical perspective, using factors analysis and logistic regression analysis to explore what factors are affecting the selection of private placement bond in China.About the topic, literature review overall is rare both at home and abroad. The domestic literature on this part is almost all about SME private debt, and almost all about theories. Foreign literature mainly from three directions. First is to summarize the research on bond financing, mainly proved that bond financing is better than equity financing. Second is about the debt allocation theory summary. This part is the main source of the theoretical assumptions in this article. Mainly elaborated the relationship between private debt and public debt. And the differences between this two is from four aspects, the cost of issue, contract cost from the moral hazard, the regulatory constraints and the contract cost from adverse selection. The third is the summary of specific research on private debt financing. Previous studies have shown that the ratio of private debt debt raised in the yield loss has more advantages to public debt offerings. And private debt is a good tool for mergers and acquisitions financing. When a company's credit rating is high, the possibility of public offerings is greater.The innovation of this paper lies in three parts. First, this article write from two aspects of corporate governance and cotporate finance. Second, analysis of the logistic regression analysis was used to treat the problem more comprehensive. Third, the conclusion of this article is not consistent with the theory hypothesis from the empirical results, which reflects the special development of China's bond market, unreasonable management of Enterprise Inc.By comparing the summary of the literature review and foreign private bond market, this paper summed up the five hypotheses. First:small and medium-sized enterprises, non-listed company are more likely to publicly issue bonds. Second: the proportion of shares of the major shareholders of a company is greater, the more possible that the company will has private debt offering. Third:the state-owned enterprises are more likely to have public debt offerings. Fourth: stronger growth, stronger profitability of a company can make bigger probability to choose the issuance of private debt financing. Five:the lower the credit rating of a company, the more the company is inclined to the issuance of private debt, private debt rating is generally lower than the public offering of bonds.This paper uses the method of principal component analysis, extracted short-term solvency long-term solvency, operating capacity, profitability and growth ability five principal components on behalf of a company from fifteen fi-nancial variables. Using principal components as dependent variables, bonds issued as independent variables. Using multiple factors logistic regression analysis. Empirical multivariate logistic regression results are the final results.The differences between the conclusions and the hypothesises are:the higher the rating of the a company the less it is inclined to issue debt raised publicly; the stronger profitability of a company, the more it is inclined to issue private debt. And most of all,short-term solvency is the biggest influence factor. According to China's current development status of enterprises,the root of the problem lies in the shareholding reform of state-owned enterprises in our country. Joint-stock reform is not completely reflected in China. And the operating efficiency of state-owned enterprises is lower than that of private enterprises. The rating career development is still immature. And the concept of credit management in the enterprise has not yet fully penetrated in our country.According to the empirical results and the problems reflected, this article finally put forward the corresponding policy recommendations and the bond market in the future. There is a necessity to accelerate the marketization of interest rates, and promote the development of innovative technology enterprises, expand the bond market financing distribution function to the greatest extent.