Research On The Factors Influencing The Credit Spread Of China's Private Placement Corporate Bond

The bond market has been booming since 2000.Since obtaining the permission of issuance and trading on exchange markets in 2007,the credit market began to improve.With the market's overall prosperity,credit risks have accumulated.Over the past few years,the domestic economy has experienced overcapacity,shortage of funds,and bad assets of banks.With the addition of other unfavorable conditions,default in the bond market happen frequently.The type and nature of the defaulted bonds have gradually expanded,and the major debtors of some large state-owned enterprises involved have had to rely on government credit to absorb risks because of the stagnant economy.The market's leverage rate continued to rise,the market bubble expanded,and the bond market credit crisis intensified.Against this background,this paper studies factors influencing the credit spread of China's private placement corporate bond.First,on the basis of reading domestic and foreign literature,this paper sorts out possible influencing factors according to the dimensions of the macroeconomic environment,the financial status of debt issuing companies,and the dimensions of individual bond issuance characteristics,to identify possible influence factors in China.As for determining the influence factors of private placement corporate bond credit spread,the development process and status quo of corporate bonds in China have been comprehensively considered,and a suitable indicator index system has been selected.In addition,this article will focus on the impact of the single bond issue feature dimension indicators on bond credit spreads.In empirical analysis,this paper uses private placement corporate bonds issued on the domestic Shanghai Stock Exchange and Shenzhen Stock Exchange bond market as research objects,and selects 1983 bonds with issuance date falling in between June 2015 and December 2017.Multiple factors including factors affecting the macroeconomic environment,factors affecting the financial status of debt issuing companies,and factors affecting the issuance of a single bond,a total of 13 indicators,entered into multiple linear regression analysis to correlate with credit spreads.The regression result show that the nature of corporate,the credit rating of bond and the size of bond have significant impact on the issuance spreads of China's private placement corporate bond.Then,this paper classifies the sample bonds into two groups according to the time of issuance and analysis them again for robustness test.The regression results show that the nature of corporate and the credit rating of bond have significant impact on all sampled bonds.Finally,with regard to the regression results,this paper proposes to enhance the policy support for the direct financing of high-quality nonstate-owned enterprises,improve the credit rating system of corporate bonds,and improve the corporate credit information system.