Research On The Influence Of Government Credit On The Issuance And Pricing Of Urban Investment Bonds

City investment company(CIC)is a general term for a kind of company engaged in ur-ban infrastructure investment construction.Its function is mainly to undertake infra-structure project construction and related investment and financ:ing activities needed by local economic development.In essence,CIC undertakes the construction and financ-ing functions that some local governments should undertake.City investment compa-nies need to raise a lot of funds in the process of project construction,so they need to issue bonds in the capital market.The bonds issued by CIC are called "Urban Invest-ment Bond".Although CIC is nominally an independent market entity,bond investors believe that the local government will "implicitly guarantee" the Urban Investment Bond facing default,so the issue pricing of Urban Investment Bond is highly related to the local government credit.Based on the theory of bond supply and demand,through theoretical and empirical research,this paper discusses how local government credit affects the issue pricing of urban investment bonds.This paper argues that the decisive factors affecting the issuance pricing of urban in-vestment bonds are the general budget income of local governments and the adminis-trative level of local governments.The higher the general budget income,the higher the issuance pricing of urban investment bonds.The higher the administrative level of local government,the lower the pricing of issuance of urban investment bonds.On the contrary,the net assets and profits of CIC have no significant impact on the pricing of Urban Investment Bond.The independence of CIC as the main body of marketization needs to be improved urgently.Based on the above conclusions,this paper suggests that we should better play the positive role of government credit in the issuance and pricing of city investment bonds,constantly strengthen the management of city in?vestment companies,and explore a more reasonable profit model for city investment companies,carry out reasonable debt replacement,and reduce the debt cost of city in-vestment companies.