Analysis Of Factors Affecting Credit Risk Premium Of City Investment Bonds

All along,urban investment bonds have been sought after by the capital market as a representative of “rigid redemption”.The number of issuances and the growth rate of net financing have been rising,posing great risks for local governments and even the financial system.Under the national anti-risk and deleveraging policy,the new debt management strategy represented by Circular No.43 was issued.The new debt management rules isolated the relationship between the risk of urban investment debt and the risk of local government debt,breaking the rigid redemption of investors.It is expected that,in theory,the credit risk premium of urban investment bonds will no longer be affected by government factors,but only in connection with its own debt repayment ability.But is this the case? This paper uses the 2015-2017 city investment bond data to empirically study the factors affecting the credit risk premium of urban investment bonds.This paper firstly combs the relationship between the credit risk of urban investment bonds from the perspectives of macroeconomics,local government,corporate finance and debt characteristics,and summarizes the theoretical influence mechanism.Then it introduces the current development status and city of China's urban investment bonds.The trend of credit spreads on investment bonds.Based on the above analysis,this paper uses the credit spread as a proxy variable for the credit risk premium of urban investment bonds,and conducts an empirical study on the urban investment bonds issued in 2015-2017.The empirical analysis is divided into several parts:(1)Analysis of the variance of the credit spread of unsecured city investment bonds and secured city investment bonds,and the difference between the two is compared,and it is concluded that there are still government implicit guarantee expectations in the market.assumed.(2)Studying the impact of local government financial status on the credit risk premium of urban investment bonds,constructing a multiple linear regression model,and finding that local governments still have implicit guarantees for urban investment bonds,but investors' expectations for government implicit guarantees are weakening..(3)Studying the impact of the financial factors of the city investment company on the credit risk premium of the city investment bond,it is known that market investors have begun to pay attention to the profitability of the city investment company,but still lack of attention to thesolvency.And with the improvement of the subject's credit rating,the degree of influence of financial factors on the credit risk premium of urban investment bonds also increased,indicating that the marketization degree of urban investment bonds with high credit ratings is higher.(4)Integrate all variables,use the stepwise regression method to establish the full-price pricing model of urban investment bonds,and use the data of newly issued city investment bonds in January 2018 to verify the regression model,and find that the theoretical prediction value of the city investment bond risk premium is higher than The actual value shows that the market's risk premium for urban investment bonds is low,and the risk of urban investment bonds is underestimated.Finally,this paper puts forward suggestions from the government,city investment companies and investors: First,the government departments should improve the credit enhancement system and formulate the legalization of financial information disclosure;second,the city investment companies should improve their risk control capabilities and steadily transform and explore.The new mode of financing;the third is that investors should rationally invest and control the financial policy environment.