| Firstly, the development of the situation and increase communication method of local government debt were studied. Changes from issuers, as well as changes in the level of bond interest, the current positive trend toward local debt market development. But at the same time, China’s local bond still exists the problem of irrational structure, funding sources need to be expanded, increasing the demand structure of the investor; Also the lack of local government bonds by using a communication method, although local government bonds in the current situation to increase trust measures demand is low, but in the long term, to increase trust measures on local government debt is still indispensable.Secondly, combining research results, the mathematical model of local government debt, the relevant mechanism of action to increase trust measures against the parties involved in local government bonds behavior research from mathematical terms. The study shows that, in the case of a government guarantee and pledge of land, as long as the bond rate slightly less than the rate of return of the project or the expected rate of return, there is growing bonds issued to facilitate power, this time balancing the number of bonds depends on the investor’s demand, and with the increase in bond interest rate increases. In addition, when the success rate of the project more than a certain condition, the equilibrium quantity and intensity of third-party guarantee or mortgage bonds / hedge rate is proportional to the collateral; otherwise requires a corresponding guarantee or hedge ratio is greater than the intensity of certain conditions, this time investment by the above-mentioned requirements and the strength of the success rate is inversely proportional to the project; if not reach the above conditions, third-party guarantees or security / collateral security useless.Finally, in the developed countries combined with international experience above mathematical analysis results, I think we can increase confidence and improve measures of Municipal Bonds the following method. I believe that the method should be established to enhance trust and tax system and the bond rating system. China’s current status of the local bond market base pitch government guarantees, I believe, should be restored and recognized by the government guarantee, so you can guarantee government control and standardization, and application objects is through restructuring and financing platform for corporate bonds into the market in general and steering PPP local debt project. For cooperation with the social capital, I think the best way is to PPP projects, PPP project by supplying funds and management improvement, to resolve the debt pressure on local governments. |
