Research On Risk Management Of A City Construction And Development Company's Issuance Of Debt Financing Plan

With the rapid development of China's economy,local governments at all levels have used financing platforms to build debts with market-oriented operations.The rising development demand has led to the rapid expansion of the debt scale of local government financing platforms,and the economic leverage has continued to rise.China has established a strict regulatory system for this purpose and increased supervision over key areas.However,in August 2018,the first case of default of urban investment bonds still appeared in the market,and the debt risk of the financing platform became increasingly prominent.At the same time,as an innovative debt financing tool for the inter-bank bond market,the debt financing plan has been favored by most local government financing platforms.It has become another path for banks to transfuse blood to the financing platform.It also increases the difficulty for supervision.The risks are also worthy of further study.This paper uses the literature research method to study the related literatures of domestic and foreign municipal bonds and urban investment bonds,including the development of foreign municipal bonds,the governance problems of domestic urban investment companies and the improvement of business problems and the study of credit spreads.Then it expounds the related concepts and characteristics of the local government financing platform and the debt financing plan,and uses the public product theory to describe the rationality of the local government's bond issuance,and on this basis,the A city construction and development company issues the debt financing plan.Case study.Firstly,it analyzes the current situation of A city construction and development company,and summarizes the basic situation of A city construction and development company and the basic elements of the issuance of debt financing plan.Then on the basis of the risk management theory,the credit risk of the issuance of the debt financing plan of the A city construction and development company is studied in depth from the issuer of the debt financing plan itself,the debt financing plan itself and other external factors.Through research,it is found that in the issue of the issuer,the city A construction and development company has certain hidden risks in terms of operation and finance;there are liquidity,credit rating,low capital use income and insufficient debt repayment guarantee measures in the debt financing plan.Risks;there are risks such as interest rate risk,industry volatility,land risk and related policy changes in other external factors,which will exert certain pressure on the company's debt repayment,which is not conducive to the maturity of the debt financing plan.Then the paper discusses the reasons for the debt expansion of the financing platform on the basis of the triangle theory.Finally,from the perspective of preventing credit risk,this paper proposes corresponding solutions to the above risks,and draws lessons from A city construction and development companies and other related financial institutions.Through the analysis of this case,this paper demonstrates the risks of A city construction and development company and proposes improvement measures,so that A city construction and development company will pay enough attention to these potential risks,and take corresponding measures to resolve risks and promote A.The city construction and development company will operate more healthily and orderly,so that it can better serve the local economic development,and also provide some guidance for other platform companies with similar backgrounds.