The Impact Of Bond Guarantees On Credit Ratings And Financing Costs

Financing through the issuance of corporate bonds is one of the important ways for the company to raise funds.It can effectively reduce the financing costs of enterprises and ease the financing pressure by means of direct financing.However,due to the information asymmetry problem in the corporate bond market,the financing efficiency of enterprises has been seriously reduced.As a credit enhancement mechanism,bond guarantee can effectively transmit relevant signals to the market and help enterprises complete the bond financing process faster and better.Firstly,this paper analyses the impact of bond guarantee on debt rating and financing cost from the theoretical level of information asymmetry and guarantee credit enhancement,then discusses the current situation of corporate bond market and guarantee market,and selects corporate bonds issued between 2008 and June 2019 as samples for empirical analysis.The research results show that bond guarantees can improve debt ratings and reduce the financing of enterprises.Moreover,with the improvement of the subject rating,the ability of guarantee to reduce the financing cost of bonds is weakened;only the guarantee that can increase the credit can reduce the financing cost.For the bond with no credit enhancement effect after the guarantee,its The financing cost is higher;the impact of different guarantee methods on debt rating and financing costs is heterogeneous.In terms of debt rating,guarantee company guarantees,the same state-owned assets company guarantee,and related party guarantees can significantly raise the debt rating,and the strength of credit enhancement is weakened in turn.The mortgage(pledge)guarantee has no significant effect on the debt rating.For the financing cost,the guarantee company guarantee and the same state-owned assets company guarantee can significantly reduce the corporate bond financing cost,and the guarantee company guarantees the best effect,while the related party guarantee and mortgage(pledge)guarantee have no significant impact on the financing cost.