The Determinants Research On Medium-Term Notes Issuance Spreads

Since October 2008,when the central bank resumed its medium-term notes issuance business,medium-term notes began to develop rapidly.The issuance scale of medium-term notes in 2017 have reached as high as 1,036.945 billion yuan,which surpassed corporate bonds and caught up with the issuance scale of corporate bonds.One of Chinese important credit debt varieties.With the rapid development of the medium-term notes market,increasing risks cannot be ignored.Studying the factors that influence the spreads of medium-term notes will help establish a simpler and more effective risk management model and overcome the lack of default samples for medium-term notes in China.And solving the difficulties in obtaining basic data in credit risk management.This paper uses the medium-term notes issued between 2016 and 2017 as a sample.The NAFMII issuance guide rate is used as the benchmark interest rate spread.And in combination with urban investment companies,although it is a “company” with non-urban investment companies,it is substantially more similar to the unique nature of the “financing platform”,and whether from the perspective of implicit guarantee expectations or business structure,there is a strong correlation with local financial resources.The model is divided into two types according to whether it is an urban investment company.Through regression analysis,factors affecting the spread of medium-term notes is analyzed by the characteristics of bonds? the factors of the issuer and the local financial factors.Through empirical analysis,it is concluded that non-urban investment companies have a significant effect on the issuance spreads in terms of profitability,debt repayment ability,and operating capacity;for urban investment companies,profitability and debt-paying ability are not as significant as those of non-urban investment companies.This article believes that its profitability reflects not the company's own profitability,but the characteristics that rely on local financial resources;from the perspective of solvency,as long as the local financial resources are more abundant,the faster the payment,the company's return will be guaranteed.The money has made the company's own solvency capability less important.In addition,local financial factors have a significant impact on the issuance of interest spreads,indicating that the City Investment Corporation,as a financing platform for local governments,has long since been stripped of government financing functions,but it has not been able to escape the link with local financial resources.Therefore,the market believes that the issue of the issuer cannot fully reflect the real risk of the city's investment bonds,and needs to be combined with local financial resources for analysis.