Study On The Effect Of Credit Risk Mitigation To Support Private Enterprise Debt Financing

Since 2018,China's bond market credit default events have occurred one after another,private enterprises credit risk concentrated outbreak,and external financing pressure increased.In order to solve the problem of difficult financing for private enterprises,in October 2018,the People's Bank of China announced that it would guide the establishment of private enterprise bond financing support tools,by selling Credit Rist Mitigation,by guarantee credit enhancement or in any other way to mainly support private enterprises which are marketable,promising,and technically competitive despite temporary difficulties.In this context,the National Association of Financial Market institutional investors to restarts the Credit Risk Mitigation,and the Credit Risk Mitigation Warrant develops in an extremely short order.Taking the restart of Credit Risk Mitigation as the starting point,this paper explores the effect of Credit Risk Mitigation in supporting private enterprise bond issuance and financing from the combining of theoretical and empirical perspective.Firstly,it expounds the operating principle of Credit Risk Mitigation from the theoretical level,and analyzes the mechanism of Credit Risk Mitigation affecting private enterprise bond issuance and financing.Secondly,using the method of empirical research,the private enterprises that publicly issue corporate credit bonds between the third quarter of 2018 and the third quarter of 2019 are selected as samples to test the supporting effect of Credit Risk Mitigation to support private enterprises to issue debt financing from the perspective of financing scale and bond issuing interest rate.Finally,according to the results of the study to draw conclusions,and put forward the corresponding policy recommendations.The research results show that the application of Credit Risk Mitigation Warrant can expand the scale of private enterprise bond issuance financing and reduce the interest rate of private enterprise bond issuance.However,the effect of Credit Risk Mitigation Warrant to expand the scale of private enterprise bond financing and reduce the interest rate of bond issuance is heterogeneous.Specifically,there are significant differences in the supporting roleof Credit Risk Mitigation Warrant in terms of the duration,credit rating,industry,asset size,and whether private enterprises issue bonds.According to the research results,this paper puts forward the following suggestions: the main body of supervision should strengthen the policy tilt,complete the system of transaction access,perfect the system of laws and regulations,strengthen the information sharing of enterprises,and improve the acquisition mechanism of Credit Risk Mitigation.The third-party organizations should expand the supporting scope of Credit Risk Mitigation,provide diversified credit products,standardize product types,and enhance the pertinence of Credit Risk Mitigation.Private enterprises should take responsibility initiatively,improve the availability of credit tools,abide by laws and regulations,and use Credit Risk Mitigation reasonably.The trading subject should abide by the trading rules and standardize the investment behavior.