Research On The Influencing Factors Of The Issued Spread Of The City Bond

City investment bonds issued by local city investment companies raise funds for the construction of local infrastructure and public utilities.City Investment debt is due to the reform of the tax system since 1994.because of the local government revenue and expenditure imbalance,the financial gap continues to expand.Since 2008,the central government has pursued expansionary policies to maintain economic growth.The expansion of fiscal policy exacerbated the imbalance of local government finance.China's budget law stipulates that local governments are not allowed to issue their own bonds,so local governments rely on their own way of financing bonds are limited.Under the pressure of a large amount of funding gap,the local government set up the city investment company,and the city investment company as the main issue of city investment bonds,to circumvent the restrictions and raise funds.With the successful issuance of the first city investment debt in 1992,the city investment debt was voted in China's bond market.city investment debt is not immediately entered the stage of rapid development,on the contrary,the city investment debt in a period of time did not receive the attention of local governments.The main reason is that in this period of time,the local government's financial pressure is not large.city investment debt subsequently experienced two major developments.The first is the beginning of 2009,the city investment debt go into the rapid development stage.The second is the beginning of 2012,the city investment debt go into the explosive growth phase.City investment bonds at the same time of rapid development,its credit risk began to highlight.On the one hand,the meager profit of the main business,the unsound financial system and the excessive liabilities of the enterprise lead to the high possibility of bond default.On the other hand,city bonds no longer have implicit government guarantees.City bond issuance spreads is the difference between the coupon bond interest rate issued by the city bond issue and the Treasury bond interest rate at the same time,which is usually used to measure credit risk.Therefore,the study of the factors affecting the interest rate of the city bond issuance will not only help the city investment enterprise to control the financing cost of the city bond,but also help the investors to make the correct value evaluation of the city bond.First of all,the related literature at home and abroad is reviewed.Then,it summarizes the city bond investment in China,focusing on the current situation and characteristics of China's urban bond investment.On the basis of the former two part,we analyze theoretically the factors that affect the interest rate of the bond issue.Through empirical analysis,we find that the interest rate of the bond issuance is significantly affected by macroeconomic factors,bond factors and implicit guarantees,while corporate factors have no significant impact on the city bond issuance spreads.