A Study On The Differences Of The Impact Of Double Guarantee On City Investment Bond's Rating Institutions And Investors

With the acceleration of the process of urbanization in our country,the city investment bonds have become an important means of local government financing.In order for the city bonds to be issued,bond issuers will seek issuance of bonds for guarantees(explicit guarantees)at the issuance of the bonds.Given the special relationship between the VCs and local governments,local governments are expected to provide bonds issue guarantee(implicit guarantee).No matter what kind of guarantee,it will affect the rating behavior of the debt rating agencies and the decision-making behavior of investors.In theory,bond rating agencies give higher credit ratings and institutional investors accept lower issuance spreads.However,the objective existence of false guarantee in reality can have an impact on the above impact.Considering the widespread hypnosis in the domestic bond rating market,the influence of the guarantee factors on the bond rating agencies and institutional investors may be inconsistent,and such differences deserve further study.This paper first analyzes the domestic and foreign scholars guarantee of municipal bonds,domestic scholars study the relationship between the city investment bonds and local governments,combing the research literature,leading to themes.Secondly,the development course of brief introduction of our country urban construction investment bonds issued in the double security problem,and respectively analyze debt rating agency's response to double guarantee,institutional investors react to double guarantee,exploring their response to the city for debt guarantee behavior is differences.Then,by selecting alternative variables,quantitative research on the difference of the impact of urban investment guarantee on rating agencies and institutional investors.Selection of 2009-2015 issued by the city investment bonds of relevant variables,the local financing platform for debt finance and local government financial variables on the basis of three kinds of variables,establish regression model,the credit rating is used to measure the bond rating agencies reaction to debt guarantees,with bond issuance spreads to measure the reaction of the institutional investors throw debt guarantees on city,using data analysis reveals debt guarantees for their impact the existing differences.Finally,the research conclusions and policy recommendations are given.The results show that both explicit and implicit guarantees can significantly improve the credit rating of city bonds,but can't significantly reduce the spread of bond issuance.That is,the response of rating agencies to guarantee and the investor's response to guarantee exist difference.Bond rating agencies approve bond guarantees,while institutional investors may not approve them.The reasons may stem from the rating bottom line of the bond rating market and the business model of "issuer pays" which leads to the false high impression of the bond rating results.In order to rational investment,investors are forced to re-identify the risk of investment caused by false high guarantee and virtual high rating,affecting market efficiency and market credibility.Therefore,we should regulate the rating behavior of bond rating agencies to ensure the authenticity of the results of the bond rating and improve the credibility of the explicit and implicit guarantee of the city investment bonds.