Before And After The Implementation Of The Registration System, The Difference Between The Impact Of Credit Risk On The Pricing Of Corporate Bonds

From March 1,2020,the new "Securities Law" was formally implemented,the corporate bonds issuance review system was officially changed from the approval system to the registration system,and the financial issuance conditions for corporate bonds were also relaxed.Under the registration system,the regulator no longer conducts substantive review of the issuer's credit qualifications,and only reviews the authenticity,accuracy,and completeness of the issuer's application materials.The credit risk of corporate bonds is completely left to the investors' judgments.The Securities Law also relaxes the mandatory indicators for corporate bond issuance.For example,the restrictions on the issuer's net asset scale,bond balance and net asset ratio are removed.The purpose of the registration system reform is to promote the further market-oriented development of Chinese bond market and increase risk awareness of the bond investors.This article takes the credit risk of corporate bonds as the main research object,and explores the differences in its impact on corporate bond pricing before and after the registration system.Chinese credit bonds are currently in the situation of multi-management and market segmentation.The regulatory policies for bond varies under different regulatory lines.The research background of this article is based on the revision of the new "Securities Law",with the corporate bonds specified in the "Securities Law" as the research object The research objects specifically include corporate bonds supervised by the National Development and Reform Commission and exchange corporate bonds supervised by the China Securities Regulatory Commission.Urban investment bonds that reflect government credit and whose pricing logic are different are also excluded.When exploring the impact of credit risk on corporate bond pricing,this article compares different credit risk measurement models and chooses to use the KMV model that is more suitable for Chinese corporate bond market to measure the overall credit risk of corporate bonds;in addition to the overall credit risk,this article also analyzed the impact of common credit risk indicators on corporate bond pricing,including the ratio of accumulated bonds to net assets,total stock market value,asset-liability ratio,corporate nature,and credit rating.Through theoretical analysis,this paper found that after the implementation of the registration system,the characteristics of the corporate bond market showed three changes.First,the threshold for corporate bond issuance was lowered,and the issuer tended to expand.Secondly,the review of corporate bond issuance accelerated significantly and bond issuance scale is showing an increasing trend.Furthermore,after the approval system is replaced by the registration system,the "hidden guarantee" of the issuance reviewer does not exist.Investors will pay more attention to credit risk when pricing bonds.Therefore,this article believes that the impact of credit risk on credit spreads will be more significant.And the influence of credit risk indicators on credit spreads will be more significant too.And this hypothesis is used for empirical analysis.Taking the corporate bonds that had transaction information from 2019 to 2020 as a sample.It is found that,one year before the implementation of the registration system,the inherent default rate of bonds under the KMV model has no significant impact on credit spreads.However,one year after the implementation of the registration system,this effect is significant.At the same time,among the indicators of credit risk,such as the ratio of bond balance to net assets?debt-to-asset ratio?issuer's market value?and credit rating have all become more significant.Therefore,this article concludes that after the implementation of the registration system,the credit spread formed by bond pricing can better reflect the corresponding credit risk of bonds and the degree of marketization of the bond market has increased.In this context,this article further proposes that Chinese current bond market should improve the information disclosure system?consolidate information disclosure responsibilities and improve the bond default resolution mechanism.