The Case Study On Credit Enhancement Of 2011 Henan Province SMEs' Collective Bond

Credit enhancement can not only enhance bond's credit rating but also decrease the issuing cost,which is significant for resolving financing difficulty and high cost of SMEs.The key of issuing SMEs' collective bond is credit enhancement,however,the mode of credit enhancement of issued SMEs' collective bond has emerged noticeable questions in the last ten years.Firstly,takes the 2011 Henan Province SMEs 'Collective Bond for instance,the paper researches its ways of credit enhancement.In addition,this paper analyzes the merit and demerit of those ways.The lightspot of the mode of Henan's credit enhancement is collective guarantees,but the mode excessively relies on exterior credit and the power of government that would restrict the bond's marketization.In order to resolve its shortcoming,the paper designs a set of new promoting mode by taking the advantage of Supply Chain Finance and Collateralized Bonds Obligation,which includes that dividing bond into two layer,giving security by upstream and downstream major firms and SMEs' risk mitigant fund,with the addition of signing counter guarantee option contact.The promotion could remedy the defect of Henan's mode,what's more reduce the cost of credit enhancement.In the end,this paper provides some reasonable suggestions about the mode of Henan's credit enhancement.