The Study On The Factor And Control Method Of The Credit Risk Of City Construction Investment Bond

After the outbreak of the financial crisis in the year of2008, some localgovernment carried out there Local city construction investment project and issuedmany city construction investment bond, followed the economic investment plan ofcentral government closely. The city Investment company service for localconstruction as well as be the Independent company, so the city constructioninvestment bond is of two different factors, the municipal bond and the corporateband, the problem of its credit risk may be very complex. So it’s very important toresearch on the sources and the control method of its credit risk.Our essay use the origin-present situation-factors-control method as clue tostudy on the credit risk of city construction investment bond. First chapter is theintroduction part, mainly introduces the background, significance and study clues, aswell as the study findings of credit risk at home and abroad. After that, we introducedthe experience of the issue and the supervision of municipal bond in America andJapan.In the second part, we introduced the present situation of city constructioninvestment bond in three different fact. We also compared the financial index of cityconstruction investment company with the industry standard value in the WindDatabase, so we can understand the present situation of city construction investmentcompany and the double attribute of the city construction investment bond moreprecisely.In the third part, we studied on the influence factors of the credit risk of the cityconstruction investment bond. At first, we analysis the influence factors in theory,then we proved it by econometric model, using the city construction investment bondissued in2011as sample. We induced all the index into six principal components bythe method of global principal components analysis, and then we do the regressionanalysis on the spread credit of the city construction investment bond, using the sixprincipal components as explanatory variables. At last, we get three factors that havesignificant influence on the spread credit of the city construction investment bond.In the forth part of our essay, we study on the control method of the credit risk.We find that the fast and effectively method is to control the scale of the cityconstruction investment bond. So we calculated the max scale of the city constructioninvestment bond in Jiangsu Province, using the KMV model. Thus we proved certainevidence for the credit vetting of the city construction investment bond. In the last partwe provide some suggestion for the control of city construction investment bond insome fact, hope to be beneficial to the healthy development of constructioninvestment bond and the future of municipal bonds. The deficiencies of this paper is that we can’t get all the data as the transaction inthe bond market is not continuous, so we can’t anlaysis the influence of fluctuation inmacroeconomic to the spread credit. Neither we can get the proper value of local landasset. If we can obtain more detailed information, our study will be more precise andcomprehensive.