Research On The Influence Of Implicit Guarantee Of Local Government On The Credit Spread Of Urban Investment Construction Bonds

Urban construction investment bonds are an important part of China’s bond market.Compared with other bonds,they have Chinese characteristics.Urban construction investment bonds have had a close relationship with local governments since their inception.As early as after the reform of the tax-sharing system in 1994,due to the mismatch between the financial rights and powers of local governments,local governments established local investment and financing platforms in order to bridge the fiscal gap,and used the platform to issue bonds to obtain funds to promote local economic construction.In view of the "quasi-municipal debt" characteristics of urban construction investment bonds,this article systematically constructs the theoretical framework of government implicit guarantees from the perspective of government implicit guarantees,so as to study the implicit guarantees of local governments on urban construction investment bonds.Impact of spreads.This article first systematically summarizes the research results of foreign scholars on municipal bonds and local government financing,and domestic scholars on the relationship between urban construction investment bonds and government implicit guarantees.Secondly,the theoretical basis of our research is formed by discussing and studying the effect mechanism of government implicit guarantees on the credit spread of urban investment construction bonds.Finally,the model is established by screening data.In the model,the control variables of the government implicit guarantee of local control variables are selected.At the same time,the control variables such as the financial variables of the local financing platform,the relevant variables for issuing bonds,and macroeconomic variables are selected to quantitatively study the impact of key variables.The results show that: First,unsecured bonds and secured bonds have no significant effect on the credit spread of urban construction investment bonds,and the stronger the local government’s implicit guarantee,the smaller the credit spread of urban construction investment bonds.Second,in the case of implicit guarantees from local government,due to the different financial strength of the administrative level of the bond issuance platform,the different administrative levels of the bond issuance platform will also affect the credit spread of urban construction investment bonds.Third,the non-standard default information of urban construction investment bonds will have an impact on the credit spread.The specific manifestation is that if the local urban construction investment bonds default non-standard,the credit spread of urban construction investment bonds in the province will increase in the short term..Finally,this article summarizes the results of theoretical analysis and empirical research,and puts forward policy recommendations.