Credit Risk Analysis Of Investment Bonds In Shandong Provincial Capital Based On KMV Model

In recent years,due to China's rapid economic development,the development of Chinese urbanization is also very rapid and it gradually increases the demand for urban infrastructure.Based on the previous related legal regulations,the local government does not allow to issue debt,local governments have to find up new ways to enhance the level of city infrastructure in the region.Among them,a more effective way is to set up city investment companies and issue urban investment bonds to realize the financing purpose of local governments.The risk of city investment companies and city investment bond greatly accelerate the process of urbanization and make outstanding contributions to pull the economic development of china.However there still exist some problems such as too much debt,unclear debt,systematic financial risk,etc.It is very significant to estimate and analyze the credit risk of city investment bond in the context of tightening macroeconomic environment and strict regulations.This paper first introduces the background and practical significance of the topic.Based on the analysis of the research status at home and abroad,this paper puts forward the research content and method adopted in this paper,and then introduces the credit risk basic theory and the commonly used credit risk measurement model.Because the KMV model has advantage over other models by comparison,this paper utilizes the improved KMV model to analyze the credit risk of city investment bonds.Secondly,starting from the concept of urban investment debt and its two main characteristics,through the policy changes of city investment bonds in recent years,the general analysis of the credit risk and causes of urban investment bonds.Then,through the analysis of the issuance scale,term,interest rate and other factors of Shandong provincial investment bonds is conducted,it is proposed that 2018-2021 is the intensive debt repayment period of Shandong provincial investment bonds,and it is necessary to pay special attention to the credit risk of city investment bonds.In the empirical stage,this paper empirically analyzes the factors affecting the credit spread of Shandong provincial investment bonds.Thirdly,using regression analysis and grey prediction model to predict the local fiscal revenue of Shandong Province,combined with the improved KMV model,empirical research on the credit risk of Shandong provincial investment bond is conducted.The default risk of Shandong city investment bond in 2019,2020,2021 is measured and the security issue scale is calculated.Finally,it puts forward some countermeasures and suggestions to strengthen the credit risk prevention of Shandong provincial investment bonds,and provides specific suggestions in four aspects,such as improving the operational capacity of city investment companies,improving relevant laws and regulations,strengthening government debt risk management,and improving the supervision of city investment bonds.