Research On The Reasons,consequences And Countermeasures Of Companies’ Credit Rating Adjustment

The bond market has continued to expand and the bond issuers and the bond products has becoming diversified with the rapid development of China’s direct financing market.At the end of 2017,the stock of domestic bond market reached 74.67 trillion yuan and the stock of credits reached 25.15 trillion yuan,which is 33.68% of the total bond market and 44% of the total A-share market value over the same period.Credits has become an important financing channel for the company.The credit rating of the entity reflects the ability and willingness of the bond issuer to repay the debt through prudent investigation and scientific rating standards and rating procedures and the principle of "objective,impartial and independent" by the rating agencies.The qualitative and quantitative analysis of risk factors that affect the solvency and willingness of enterprises can be done by rating agencies,which can comprehensively assess the possibility of performance of enterprises,and it is a comprehensive index for measuring the qualification,solvency and default probability of enterprises.The research shows that credit rating can provide effective information value,reflect the credit risk level of enterprises,and has a significant impact on financing costs and financing decisions.This paper introduces the development of domestic bond market and credit debt market,and summarizes the development history,structure classification and regulatory structure of credit debt market.This paper also discusses the development history,industry competition and supervision of the domestic credit rating industry,and compares the similarities and differences between the domestic and international credit rating frameworks and rating methods.In addition,this article thoroughly discusses the financial factors affecting credit rating adjustment.This paper also discusses the consequences and corporate responses.First,the paper adopts a logistic regression method to analyze the core financial factors that affect the upward adjustment and downward adjustment of corporate credit ratings based on the data of the credit rating adjustment(467 bond issuers in 2017).The research results show that rating agencies are more inclined to consider corporate debt capital ratio,total asset growth rate and period expense rate when rating is downgraded.They are more inclined to consider corporate total asset yield and net assets and three indicators of net profit growth when rating is raised.Second,this paper uses Tangshan Jidong Cement Co.,Ltd.as an example to analyze the short-term market effects of credit rating adjustment by event study method.The results show that the downgrade of credit rating will cause losses to the company’s value and investors’ interests.Finally,the paper discusses the medium-and long-term financial effects of credit rating adjustments through changes in the financial situation of Tangshan Jidong Cement Co.,Ltd.before and after the rating adjustment.The results indicate that the downgrade of credit ratings has a significant negative impact on corporate bond financing costs and comprehensive financing costs.The downward adjustment prompted enterprises to optimize the capital structure and reduce the level of debt.However,due to the increasing difficulty of financing,enterprises appear short-term liability characteristics,and are more dependent on high cost financing.They also have a tendency to reduce investment scale and accelerate cash flow recovery in investment and financing decisions.