Study On The Risk Prevention Of Local City Investment Bonds

With the rapid development of China's market economy and the advancement of urbanization,the demand for funds for urban infrastructure construction projects has become stronger and stronger.Local governments can not support fiscal expenditure only through taxable income or the financing of central government.In the case of insufficient financial resources,it is hoped that direct or indirect financing instruments will be used to obtain public utilities and municipal projects.This type of bonds are collectively referred to as municipal bonds in foreign countries.As a result of laws and regulations,local governments have received many restrictions on their own issuance of bonds.in order to ensure that the local municipal construction funds in place and the smooth progress of the project,only through a mediocre nature of the channel to raise social funds,China city investment debt began to embark on the stage of history.City investment debt,is a kind of strong with the characteristics of Chinese socialism bond type,it appears to avoid our introduction in 1994,"Budget Law" where the local government can not issue their own legal restrictions on debt.City investment debt bythe local government through the injection of land,capital and other means of the establishment of local financing platform(also known as "City Investment Company"or "platform company"),by the city as the main body through the capital market A class of bonds.In the process of issuing bonds in the city,the local government is often to provide implicit security,as the city's debt to the bottom of the debt.After the outbreak of the US financial crisis in 2008,in order to alleviate the impact of the domestic economy,the central government introduced a four trillion investment plan,through investment to stimulate economic development,and encourage local governments to set up financing platform to raise project funds,local governments have also called,A local financing platform,large-scale issuance of bonds to raise funds for urban construction projects,city investment debt began to expand the development.However,with the expansion and increase of the scale and number of issuance and debts in China,the risk of investment in the city has begun to be exposed.There have been some defaults in urban investment and debt default.Among them,the famous highway investment in Yunnan Co.,Ltd.(referred to as the Yunnan Highway)to its creditor bank letter called "now only,only interest is not the debt",and Yunnan Highway Company has been in the Construction Bank,ICBC and so on more than a dozen bank loans nearly 100 billion yuan,and ultimately through the bank,The joint efforts of governments and enterprises to successfully resolve the risk did not form a real default.At the end of June 2011,Shanghai Shenhong Investment&Development Co.,Ltd.,due to the violation of the provisions of the CBRC,used a large amount of working capital loans for the construction of the project,resulting in the chain of repayment of the Company's debt service chain and had to stop the repayment of the loan to the bank and Section period.Although it was later reconciled by the banking regulatory bureau,Shen Hong company and the creditor bank reached an agreement,the bank set up syndicate to continue to lend,temporarily alleviate the Shenhong company's debt service pressure,although ultimately did not form a real default,but this is enough to cause us The importance of the risk of default on city investment debt.In this point,this paper will take the risk of China's city debt as the object of study,using theoretical analysis and case analysis of the combination of research methods,first elaborated the basic concept of city investment debt and its appearance.After the exposition of the concept of debt-related,this paper summarizes the development of the city investment debt situation,that is,China's urban debt in the issuance of the scale and amount of the same time,the number of unsecured city investment bonds is also increasing,The credit rating and its issuer's credit rating has declined,the city investment debt this bad distribution trend to the majority of investors to bring the potential risks.The third part of the article mainly analyzes the types of risk of city investment debt and the influencing factors of risk,and tries to analyze the possible risk situation of city investment debt from the angle of macroeconomic point of view,local government and issuer.The fourth part of the introduction of specific cases:Quanjiao County Construction Company in 2016 issued to raise a total of RMB 1 billion investment in the city,the project funds for urban infrastructure projects and affordable housing projects.Through the analysis and discussion on the specific risks faced by the city's debt issuance,it is concluded that the risk of raising funds by various investment companies in the current state of the city's investment debt is the risk of liquidity,The risk of credit rating and the risk of macro-market fluctuation.The fifth part puts forward some precautions from the issuer,the local government and the city's debt itself,and so on.The risk of investment in the city,the construction of preventive mechanisms and measures.The last part is the conclusion and prospect of this paper.