The Study Of Corporate Bond Financing Cost Influencing Factors

China’s economic downward pressure was still large in 2015. The people’s bank of China decreased interest rates five times and reserve requirement ratio four times to stimulate consumption and investment. Bond market continued "bull market" with capital injection, which lead to the bond financing cost has been declining. Meanwhile, government speeds up the pace of perfecting our country’s bond market and lowers corporate bonds threshold to encourage enterprises bond financing activities. Against this background, China’s bond market scale duiring 2015 rocketed up 88.84% from a year earlier. At the moment, it is very meaningful to research the influencing factors of corporate bond financing costs, which could help the corporate reduces the bond financing costs through suggestions based on the influencing factors of corporate bond financing costs.Most existing research conduct deep study from one influencing factor or empirical research from several influencing factors.In fact, the influencing factors of corporate bond financing costs includes both qualitative factors and quantitative factors, and in the majority with qualitative factors.Theprevious researchesgenerally miss some qualitative factors to make the result not comprehensive because a large number of qualitative factors are very difficult to appropriate quantization.This study reviews the previous literatures firstly, and then made a clearly defined the relevant concepts.The result is influencing factors of corporate bond financing costs including macro economic environment, policy environment, regional and industry environment, enterprise competition and anti-risk ability, business conditions, corporate governance, strategic planning, financial position and past debt performance, but the weight of influencing factors depends on the type andindustry of the corporate. Through analyzing the nineinfluencing factors, we can identify the target corporate bond financing cost roughly will be above, below or similar to the average bond financing cost of same industry with same deadline and bond types.Next, we analysed one water business enterprise from the nine influencing factors and the conclusion is consistent with the fact.Finally, we made recommendations to corporations on how to conduct bond financing activities with lower cost from three aspects that are choosing appropriate debt financing structure and timing, enhancing business and profitability levels and publishingthe efficiency of corporate governance.