The Research On The Debt Financing Analysis Of Initial Project

The economics of China has been developing rapidly since twenty-first Century, Many various projects were spurred by this pheromone as well. Such as the projects for Urbanization and the projects of new technology are increasing year by year. Project Financing has played a pivotal role in the building of projects, It solve the financing problems that caused by the large investment, high risk and long cycle in the projects.But it needs much debt capital in the initial project. Banks are taking the strategy of credit crunch as the reason of the lack of collateral assets in the projects. Inflow of funds has been limited to projects. The project sponsors have to find other investors to get debt capital. Because of our law does not allow the firms lent loan to each other directly. So the project investors of debt capital except more rewards, Non-financial institutions trend to equity investment, So It is forming the conflict between the project sponsors and project debt investors.At first, the study discussed the theory of project financing and the development and research status at home and abroad. Then it analyzed the financing cost of project sponsors and the investing reward of debt investors to find the formation of contradictions between investors and sponsors through the mathematical model. It proposed to resolve the contradictions by changing the capital structure make the Risk-benefit of investors and sponsors of the projects balanced.At last, It was studied the financing model at aboard and proposed the opinion include the mixed strategy, the mechanism of competition, the organizational innovation and the protection of the lender mechanisms to find the better way for reducing financing costs and expanding debt capital channels.