Study Of The Influence Of Corporate Financial Ability On Credit Spreads Of Corporate Bonds

After more than 30 years of development,China's bond market has made great achievements and played a positive role in support China's real economic development through expanding the proportion of enterprises' direct financing.However,the accumulation of credit risk brought by the rapid development of the bond market,especially in the context of economic downturn,is particularly worthy of vigilance.To a certain extent,default probability of corporate bonds can be reflected through the bond credit spreads.So it is important to study the influence factors of credit spreads for investors to filter valuable bonds and avoid investment risks.However,China's bond market is relatively immature which resulted in the facts that corporates' the impact of financial situation on the spread of is not significant,and investors only paid attention to the surface instead of the real situation of corporates.However,the company's own operating conditions in the bond pricing should play a role theoretically.Therefore,the research is helpful to improve the ability of the market credit risk pricing,promote a basic system of the bond market,guide the investors to analyze the value of the bonds objectively and encourage the enterprise's survival of the fittest,thus supporting the development of the real economy.First of all,four kinds of mainstream credit spreads are evaluated.On the basis of considering the advantages and disadvantages,the regression model is selected as the research model in this paper.And the influencing factors of credit spread in domestic and foreign literature were analyzed,which provides theoretical support for empirical research.Secondly,based on the analysis of the related methods of financial indicators,this paper chooses the principal component analysis as the main method to measure the financial capacity of the enterprise.Through principal component analysis,21 financial indexes of the six aspects were re-linearized.In the next,according to theoretical and realistic analysis,five main components of the financial capacity of enterprises and other factors that may have influence on the explanatory variables was represented in the regression model.Then it did the empirical test and figure out factors which have influence on credit spread of corporate bonds.Finally it further analyzed the relationship between financial Factors with the credit spread of corporate bonds.The novelties of this paper are as follows.First,this paper considers the financial evaluation system from a more comprehensive perspective,and uses the principal component analysis method to build a comprehensive financial indicator.Secondly,when studying corporate financial ability and other micro factors which influence corporate bond credit spreads,this paper uses panel data rather than non-cross section data to expand the observation capacity.And at the same time this paper chooses time fixed effects model to solve the problem of macroeconomic factors which change over time but not with individual factors.Through the above process,the results of this paper are as follows:firstly,only a part of the financial factors have a significant impact on non-city investment bonds.Secondly,the impact of rating on the spread is not obvious.Thirdly,the issue size,the remaining period,security and industry factors such have a significant impact on credit spreads.