The Case Analysis Of Licheng Urban Construction Financing Platform Loan

Under the dual pressures of the international financial crisis and the domestic economic pressure, Supported and promoted by the central policy, Since 2008,Local government financing platform to become a new round of local government finance main body. Local government financing platform has experienced in numbers from less to more, in debt levels from low to high. In the country’s macroeconomic development and urbanization. It reflects the indispensable role. Local government financing platform with high debt ratio, low return on assets and other characteristics. With the rapid development of local government financing platform, promote the continuous expansion of the scale of local government debt, once the local government financing platform have debt risk, will lead to a more serious debt crisis. Commercial bank loans to local government financing platform as the main source of funding for local government debt, the credit risk has begun to show. If there is no appropriate preventive measures and strategies, the future will have a huge threat to the healthy development of China’s financial system, therefore, it is of practical significance to study the credit risk of the financing platform loan.Under this background, this article from the default case of Licheng urban construction financing platform, introduces Licheng urban construction financing platform establishment, development, to the final decline and default. This paper analyzes the sources and manifestations of the credit risk of the financing platform loan, and expounds the transmission mechanism of the source of repayment and the credit risk, as well as through the transformation of the KMV model to analyze the credit risk of loans. Through the analysis, Licheng urban construction financing platform has a certain value in the course of the development of local government financing platform. But with the development of society and the continuous innovation of financial reform, the local government financing platform is gradually out of the dominance of the era, and accompanied by fierce competition in the market. Local financing platforms such as Licheng urban construction also cannot get a lot of good projects, causes the company’s cash flow break, the last is not on the loan. The lack of cash flow is an important factor to lead to the final breach of contract. Finally, put forward the countermeasures and suggestions to resolve and prevent the related credit risks from commercial banks, the local government and financing platform company these three angles.