The Impact Of Implicit Guarantee On Spreads In The Background Of Credit Debt Default

The hidden secrecy of the government behind the state-owned enterprise bonds has always been a hot spot for scholars.Due to the existence of hidden guarantee,before 2014,China's bond market without a substantial breach of contract.However,with the economic downward pressure increased,after 2014,state-owned enterprise bonds became the most serious disaster areas,involving large amounts and serious nature.The "rigid redemption" brought by the government implicit guarantee is expected to lead to the risk of the market and the lack of efficiency in determining the risk premium,the risk of the investors and the unequal gains.It is very practical to study how the implicit guarantee of government affects the credit risk of state-owned enterprise bonds.More and more institutional investors and research scholars began to pay attention to the impact of government implicit guarantees on bonds.At present,domestic and foreign scholars in this area mainly includes the government implicit guarantee on the impact of bond financing costs,the impact of credit rating and so on.This paper aims to study the impact of government implicit guarantees on the spreads of state-owned enterprise bonds.China's eastern and southern China's economically developed,large amount of debt,and bond trading is active,so the data is more representative.Therefore,this paper takes the state-owned enterprise bonds in East China and South China as a sample to study how the implicit guarantee of government affects the spread of state-owned enterprise bonds.First,the analysis of the relevant theory of issuance of spreads,the definition of the study of the issuance of spreads mainly include the risk premium type.Then,the time span of the sample is determined to be January 1,2012 to December 31,2016,because the issuance of our bonds is relatively concentrated in this period of time.We choose the state-owned enterprise bonds in all industries except East and South China(8 provinces and 1 municipality)as the research object.Then,a multivariate regression model is used to analyze the mixed cross-section samples of state-owned enterprise bonds to determine the impact of government implicit guarantee on the spreads of state-owned enterprise bonds and the credit rating,and to explore the role of credit rating in the spread of spreads.Finally,the calculation of the dependent variable is used to test the robustness of the model.The conclusion of this paper is as follows:(1)The implicit guarantee of government will have a significant impact on the spread of bonds,that is,the smaller the government revenue and expenditure ratio is smaller,and the higher the local government debt The greater the spread,indicating that the implicit guarantee in the state-owned enterprise bond market is still working.(2)credit rating does play a regulatory role in the spread.The innovation of this paper is to measure the intensity of government implicit guarantee with the ratio of local government revenue and expenditure and local government debt to GDP,and make one of the influencing factors of state-owned enterprise bond default.