Financing Analysis Of Local Government Special Bonds

In 2008,$586 billion stimulus package launched bythe central government,in which the local government needs the relevant matching funds to cooperate with the central active fiscal policy implementation,for which the local government financing platform to form a large amount of stock debt.It is estimated that the local government's municipal corporate bond amount in 2014 reached 3.3 trillion,and does not include the bank to the city investment company loans.Such local governments have the implicit guarantee obligations of the debt to become China's economic development "hidden trouble".In the context of the economic downturn,China's economy is in the "L" type of background,the local government revenue is reduced,while the local government financing platform is facing a large number of debt repayment problems,which local governments have a serious challenge.In the context of the accumulation of government debt risk and the high cost of financing,in order to standardize the development of local government financing platform,control the local government through the platform company blindly debt,to prevent the occurrence of systemic financial risks,the state repeatedly introduced policy constraints financing platform financing,requiring the establishment of government bonds as the main body of the local government debt financing mechanism,the implementation of local government debt control,to prevent and resolve the debt risk.In order to make the invisible guarantee of local government debt dominate,reduce the local government financing costs,ease the debt pressure,reduce the risk of debt maturity,the central revision of the budget law,allowing local governments to local debt.Since 2009,the local government issuing bonds model has experienced "generation compensation",pilot provinces and cities "spontaneous compensation" and "spontaneous self" three stages.The original intention of this topic is to analyze and think about the local government debt.From the current trend,the local bond market has been gradually liberalized,local government bond issuance will become a new research hotspot.The current local debt mainly includes general bonds and special bonds,the general bonds mainly for non-income public welfare projects,the general public budget income to repay.Special bonds for land reserves,toll roads have a certain income of public welfare undertakings development,mainly to government funds income repayment.Based on the analysis of detailed analysis,this paper mainly studies the financing situation of special bonds under the mode of spontaneous self-compensation.This paper focuses on "financing case of Jiangxi's special bond in 2015",through the reference of relevant literature at home and abroad,from the determination of the debt limit,the choice of rating agencies,the selection of underwriting syndicate,the choice of distribution methods,the five parts indicating the issuance of Jiangxi's special bonds in 2015.And analyzing the special bond financing of Jiangxi from the main body of debt issuance,the source of repayment,the financing of the general bond and other special bonds in the province,and analyzes the four aspects of the special bond outlook.The analysis shows that the stock of debt is concentrated in the bank which may easily lead to systemic financial risk,county-level over-reliance on higher-level subsidies which may easily lead to structural debt risk,the source of debt relies on land transfer payments which is vulnerable to market volatility,directional underwriting special debt lack of liquidity,resulting in lack of enthusiasm for the organization,but open issuance will impact the market,credit rating mechanism is unreasonable,did not show the regional differences in the project,debt management confusion,debt management laws are not sound and so on.I suggest that the following aspects can be improved.First,enhancing the liquidity of special debt to prevent the concentration of debt in the bank,reducing the cost of issuing bonds,reducing agency problems,promoting the sustainable development of special bonds.Second,developing PPP model to solve the city and county levels of local government funding problems,inhibiting the excessive expansion of government debt,to solve the problem of urban construction funding to prevent over-reliance on land transfer payments and follow-up risk problems.Third,improving the rating mechanism,the introduction of a third party to a reasonable rating of the special debt,the information fully disclosed to prevent information asymmetry,credit rating agencies should also strengthen the special bond issuance system,laws and regulations to strengthen the special bond credit rating theory and the credit rating method of research,according to laws and regulations and financial management system changes timely adjustment and update the special bond rating method.Fourth,improving the debt management,to prevent the general debt and special debt is not clear in Jiangxi,special debt internal control should run through the whole process,to achieve full control of the debt financing behavior.