Research On The Evaluation Of Local Government Special Bonds' Debt Repayment Capacit

After the Ministry of Finance issued the Interim Measures for the Management of Local Government Special Bonds Issuance on April 7,2015,local government special bonds have witnessed rapid development and gradually become one of the main channels for local governments to borrow money.The issuance quota has increased year by year.In 2020,4.1405 trillion yuan of local government special bonds were added nationwide.With the size of the debt rising,the question of whether special local government bonds can be fully repaid or not caused attention in many ways,this is due to its particularity of the repayment.In another word,the government use the project benefits rather than the general public budget income to repay.But earnings of the project is uncertain,and some special bonds for the present project has the problem of imbalances.If the project income cannot repay the principal and interest of special bonds,it will not only impact the bond market,but also affect the government’s reputation.Therefore,it is of practical significance to evaluate the debt paying ability of local government special bonds scientifically and objectively,and to construct an evaluation system of the debt paying ability of local government special bonds.Based on the existing credit rating method of local government special bonds,this paper optimizes and constructs a set of evaluation index system and model to evaluate the solvency of local government special bonds.In view of the characteristics that local government special bonds are mainly repaid by the income of the project,this paper constructs the evaluation index system from the dimension of project and local government based on the public goods theory and public debt theory,and uses the analytic hierarchy process(AHP)to determine the weight of indicators.And then the evaluation model is built by using the fuzzy comprehensive evaluation method.On this basis,this paper takes the special bond of Laixi water supply project as an example to study.The study finds that the solvency of the special bond of Laixi water supply project is in the excellent grade,but there are still some risks: There is room for improvement in the project’s debt repayment guarantee capacity,at the same time the economic base of the Laixi government is weak,though the total government debt is not high,the debt growth rate is high,therefore there may be high debt repayment pressure in the future.Accordingly,this paper puts forward specific suggestions: Improving the project solvency by increasing the project revenue and supervising the operation of the project scientifically and effectively.At the same time,enhancing the solvency of local government through developing the diversified industries to improve the regional economic strength and reasonably controlling the scale of debt.In addition,credit enhancement means are also can be used to ensure the repayment of special bonds.Through the study of this paper,the local government special bond solvency evaluation index system and model are built,and the solvency of Laixi water supply project special bond is evaluated,which on the one hand,supply the lack of research on the repayment of special bonds in China,on the other hand,can provide reference for the solvency evaluation of other special bond,and for perfecting the credit rating of the local government special bond.