Research On Issue Pricing Of Project Revenue Bonds

The project revenue bonds are closely related to the specific projects.The funds raised are used for the construction and operation of the projects,the first repayment source of the principal and interest of the bonds is the future profit of the project.On the one hand,the project revenue bonds pay attention to the issues rating rather than the issuer rating,thus lower the requirement of the issuer and the applicable scope is more extensive.On the other hand,local governments do not bear the direct repayment responsibility of project revenue bonds,conforming to the guidelines of Circular 43.What are the factors that have been taken into account in determining the issue price of the infrastructure project revenue bond,and what is the pricing process,which is the emphasis of this paper.Studying on the issuance of project revenue bonds,it is found that the profitability requirement of the issuer is not high,the maturity cannot fully match the project financing needs,the results of bond rating concentrated in AA,AA + and AAA,a large amount of project revenue bond issuance is private offering.Nearly half of the bond project is Shantytowns renovation project.And in order to improve the rating,project revenue bond more commonly used external credit measures.The project revenue bond is priced in bookkeeping mode,but the degree of marketization of the pricing mechanism is weaker than the public tender,which may be influenced by the subjective opinions of the issuer and the underwriters.The central corporate bonds,local corporate bonds and project revenue bonds horizontal comparison found that the three interest rates generally increased in turn,the specific impact factors need to further explore.The pricing process of infrastructure project revenue bond refers to risk-premium theory.The benchmark interest rate is determined first,and the factors affecting the offering yield of the project revenue bond are refined from the external market environment and the bond itself.After analyzing the influence path of each factor through the mechanism analysis,the data of 57 project revenue bonds issued from November 2014 to May 2017 were collected and analyzed by stepwise multiple regression method.The study found that China's project revenue bond issuance interest rate mainly affected by the Treasury bond yields,distribution and credit rating.Treasury yields reflect the average cost of bond market financing and have a positive impact on the issuing interest rates.Public offering bonds are less risky due to asymmetric information than private bonds,and it leading to a lower interest rate.The higher the credit rating,the better the quality of the project and the lower interest rates.