| Urban investment bond was born under the background of China’s special market economy development.As a financing tool with special purpose,the issuing subject of urban investment bond is generally the urban investment platform established by local government or its subordinate institutions.With the explosive growth of urban investment bond issuance scale in recent years,the problems under its prosperity are gradually exposed.The funds raised by URBAN investment bonds are mainly used for large construction projects such as local infrastructure.The economic benefits of some projects cannot fully cover the principal and interest in the short term,and the accumulated credit risks constantly increase the risk premium of urban investment bonds.In the process of bond financing,there often exists the problem of information asymmetry between the two sides.As the credit rating mechanism and guarantee mechanism emerge,investors can refer to the information provided by the two mechanisms when making investment decisions,which reduces the information asymmetry and further affects the risk premium of bonds.Credit is the guarantee for the smooth operation of the bond market.This paper will deeply discuss the path of credit rating acting on the risk premium of URBAN investment bonds,and study the credit enhancement effect of guarantee mechanism based on the current development status of guarantee mechanism,that is,whether the adoption of guarantee can effectively reduce the risk premium of urban investment bonds.After sorting out relevant theories and summarizing relevant literature research results,this paper will select urban investment bonds issued between July 2018 and June 2021.06 as samples,query and sort out relevant data for regression analysis.This paper focuses on the factors affecting the risk premium of urban investment bond,including credit rating level,rating method and whether to adopt guarantee.The article also further joined the geographic location,issuers administrative level factors as control variable,descriptive statistics results show that the distribution to the geographical location and different administrative levels of the bonds: present a more obvious differences between the central and western regions udic debt significantly better than the average risk premium of east city for debt;The average risk premium of city-level or county-level URBAN investment bonds is also significantly higher than that of provincial urban investment bonds.The empirical research results include the following points :(1)the higher the credit rating,the lower the risk premium of urban investment bond.(2)Compared with bond rating,subject rating has a more obvious effect on reducing risk premium.(3)The effect of guarantee on risk premium of urban investment bonds with different subject ratings is different.For urban investment bonds with subject ratings equal to or lower than AA,guarantee measures can significantly reduce the risk premium;For the main rating of AA+ city investment bonds,guarantee will lead to a higher risk premium;The adoption of guarantees does not have a significant impact on the risk premium of triple-A-rated urban investment bonds.(4)The risk premium of urban investment bonds guaranteed by the third party is lower than that guaranteed by pledge.According to the above research conclusions,investors can avoid adverse selection and moral hazard caused by urban investment bonds to a certain extent by referring to credit rating results that truly reflect credit conditions.At the same time,for the city investment bonds with low rating,the method of guarantee credit can be adopted to effectively reduce the risk premium.In the development process of urban investment bond market,it is necessary to constantly improve the issuing channels and repayment mechanism.The research results of this paper can not only show the overall situation of the market,but also have a certain indication for investors. |
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