Research On The Impact Of China's Credit Rating On City Investment Bond Issuance

Bond issuance cannot be separated from the support of credit rating,and the establishment of credit rating system cannot finish without the perfection of bond market.It's complementary between bond issuance and credit rating.In the market of bond issuance,the impact of credit rating on bond issuance is particularly significant.At present,the city investment bond market is the most important bond issuing force in the bond market of our country.From the history of domestic bond development,apart from the national bonds and financial bonds,the city investment bond is around half of the bond issuance.In some areas,the issuance of city investment bond determines the weather vane for the issuance of bonds in the region.Therefore,the study of the impact of credit rating on the issuance of city investment bond is of certain significance to understand the city investment bond and its credit risk,and to study the local government debt risk.As a special issuer in China,this kind of bond is distinguished from other bonds.Especially for the case of "rigid payment belief",the issue pricing of city investment bond is lack of data support because of the history of zero default,and according to the domestic and foreign rating model,default data is an inextricable data problem of rating model.Therefore,in the absence of this data support,credit rating agencies cannot make accurate judgment according to historical data,and it may make a mistake of credit rating.Whether the credit rating can have a significant impact on the cost of city investment bond issuance is worthy of our consideration and need to be verified.First of all,based on the research of credit rating and bond issuance domestic and overseas,the research analyzes the basic situation of city investment bond and credit rating in detail,starting from the concept and issuing conditions of city investment bond.The research probes into the issuance of enterprise bonds,corporate bonds and debt financing instruments in the city investment bond market,and analyzes the pattern of the city investment bond market.Through the analysis of the research,we find the current situation that there are various kinds of imbalance in the city investment bond market,and the city investment bond is one of the most important financing methods of the City Investment Corporation.In addition,the research also studied the development of credit rating and credit rating methods,and learned that credit rating plays a very important role in bond issuers,investors and bond market.Secondly,through the analysis of the influencing factors of credit rating and the issuance of city investment bond,the research finds the internal relationship between credit rating and city investment bond.The research finds that the credit rating may affect the issuance of city investment bond by influencing the liquidity of the city investment bond,the threshold of entry and revealing the credit risk.In theory,credit rating is able to play a significant role in the issuance of city investment bond in China.Finally,the research selects a sample of 5,524 bonds issued from 2014 to 2017 from the wind database,and establishes a linear regression model which taking the nominal interest rate as the dependent variable,and taking the credit rating,the scale of issuance,the period of issuance,the SHIBOR(1Y),the redemption and the resale as independent variable.Through the full sample regression analysis,it is found that the change of credit rating level has a significant impact on the bond issuance cost,I.E.the change of nominal interest rate.In addition,the research also make linear-regression analysis for these sample data separately according to corporate bonds,medium-term notes,corporate bonds,PPN bond classification.In the regression analysis of the bonds classification,the results show that the credit rating also has a significant impact on the coupon rate of bond issuance.The results of these regression analysis all prove the judgment that credit rating can significantly influence the city investment bond issuance,and can effectively reveal the credit risk information of city investment enterprises like credit rating affects the issuance of general bonds in the market of bond issuance.In addition,in the process of empirical analysis,the research also shows that in the city investment bond issuance market,the issue scale of the city investment bond has no significant effect on the issue cost,and the credit rating of the city investment bond is generally low.At the end of research,in view of the result of empirical analysis and the problems of low rating and debt risk,this paper summarizes and analyzes the research conclusion that credit rating has significant influence on the issuance of city investment bond,and with this conclusion,this paper puts forward some suggestions such as paying attention to the construction of developing credit rating,perfecting the unified supervision,and paying attention to the supervision function of credit rating on the city investment bond.