The Separation Of Ownership And Control Of Ultimate Controller,Financial Preference And Credit Spread Of Corporate Bonds

China Securities Regulatory Commission promulgated the regulation to control the issuance and trading of corporate bonds in 2015,which not only expanded the range of the issuers and enrich the ways of the issuance but also simplified the process of issuance.It provided the more convenient conditions for the issuers of corporate bonds,which impelled the enormous scopes of issuance.There are 1219 corporate bonds came into the market for trading just in 2015,which attract attention of nearly every people in China.Based on this research background,the separation of ownership and control in ownership structure is the starting point of this paper.Then the influences on the credit spread of corporate bonds and the financial preference of firms are the purposes of this paper.The credit spread of corporate bonds is equal to the yield to maturity of corporate bonds minus the yield to maturity of risk-free bonds,which represents the evaluating value of outside investors.Through the research among the separation of ownership and control in the ultimate controller,the financial preference of firms and the credit spread of corporate bonds,this paper will want to understand the relationships among capital structure,ownership structure and outside investors.Through the researches of predecessors both at home and abroad,three points can be discovered.First,the particularity of the separation of ownership and control in China can be researched on the relationships between the separation of ownership and control in the ultimate controller and the financial preference of firms.Second,the necessity of supplementary value is still important on the relationships between the financial preference of firms and the credit spread of corporate bonds.Third,the researches about the separation of ownership and control in the ultimate controller and the credit spread of corporate bonds have a relatively small number,which still has some research value.Therefore,the subjects of this paper are corporate bonds which were researched rarely.And the links between the separation of ownership and control in the ultimate controller and the credit spread of corporate bonds in this paper are the financial preference of firms in China,which represents the capital structure of firms.Based on the real-time economic background and our national conditions,this paper has some innovation and practically applied value.Based on the ultimate property right theory,pecking order theory and structured pricing model,this paper proposes three empirical hypotheses.Then the undue corporate bonds,which trading in two markets by the end of 2015 are the sample data of this paper.By building the logistic regression model,this paper tested three empirical hypotheses.There are three points can be discovered by testing.Firstly,the separation of ownership and control in the ultimate controller has an obviously positive correlation with the financial preference of firms.Secondly,the financial preference of firms has an obviously positive correlation with the credit spread of corporate bonds.Thirdly,the separation of ownership and control in the ultimate controller has an obviously positive correlation with the credit spread of corporate bonds.These conclusions reflect the relationships among capital structure,ownership structure and outside investors.And these conclusions also express the process of information transmission between internal and external to the organization.Finally,on account of the conclusions,this paper puts forward some suggestions about the ownership structure and the credit spread of corporate bonds.On the one hand,this paper suggests controlling the pyramidal shareholding behavior and supervising the behavior of the ultimate controller in China.On the other hand,this paper suggests perfecting the pricing mechanisms of corporate bonds and enforcing the proportion of ownership structure,which will make the credit spread of corporate bonds become more really and rationally.