Research On Die Influence Factors Of Credit Spread On China’s City Investment Bonds Based On The Perspective Of Credit Enhancement

In the 1990s,the reform of the tax-sharing system and the subsequent process of urbanization brought sustained impetus to China to develop,but also let the local government’s finances can’t be effectively supported.The city investment bonds appeared and effectively solve the problem of local urban construction needs of insufficient funds.However,a series of cases of default risk of city investment bonds default have been produced,which,to a certain extent,exposed the uneven qualification slack and the risk of relying too much on local government finance.And then triggered the academic circles and the government’s thinking on local hidden debt.Although in "No.43 document" in 2014 and No.50 document of six ministries and commissions in 2017,the government has made it clear that it is necessary to divest the financing functions undertaken by local governments,and can no longer guarantee the urban investment bonds.However,the actual controller of many city investment and financing platforms is still the local government,which may continue to affect the financing cost of city investment bonds and then affect the credit spread.This paper deconstructs the influencing factors of the credit spread of city investment bonds in China from the perspective of credit enhancement,and takes the explicit guarantee mechanism and the implicit guarantee local government situation into consideration.Through the collection of city investment bonds issued in 2015-2019,the panel data are analyzed empirically.Under the background that the myth of "rigid payment"of city investment bonds has gradually dissipated and the stock of city investment bonds has been continuously transformed,this paper makes an in-depth study on the influencing factors of the credit spread of city investment bonds in China from the perspective of credit enhancement,and at the same time makes an expanded study on the influencing factors of the interest spread of city investment bonds in Suzhou.It is found that the market has a significant reflection on the debt factors of city investment bonds and the internal credit enhancement factors represented by the operating conditions of urban investment and financing platforms,while the market is also very concerned about the existence of explicit guarantors.The improvement of local financial coverage and economic development can significantly reduce the credit spread of city investment bonds,which proves the existence of invisible guarantee mechanism.