Study On The Financial Effect Of "Bond + CRMW" Financing For Private Enterprises

Private enterprises are a key force in China’s national economy and play a unique and irreplaceable important role in creating jobs and promoting economic growth.As an economic entity with strong market competitiveness and flexibility,private enterprises can facilitate resource allocation,promote innovation and improve production efficiency,and are an important builder of socialism with Chinese characteristics and an important driving force of economic and social development.However,for a long time,private enterprises have been facing the problem of difficult and expensive financing,and in order to solve this problem,in 2018,the executive meeting of the State Council decided to establish a debt financing support instrument for private enterprises,adopting a market-based approach to support private enterprises in issuing debt,with the People’s Bank providing initial funding support to professional institutions in accordance with the law and entrusting them with the principle of market-based operation and risk prevention to provide debt financing for well-operated private enterprises with The People’s Bank of China(PBOC)provides initial financial support to professional institutions in accordance with the law,and entrusts them to operate in accordance with the market and risk prevention principles,to increase credit support for private enterprises with good operation and temporary liquidity difficulties in issuing bonds.Among them,credit risk mitigation certificates(hereinafter referred to as: CRMW),as one of the credit risk mitigation instruments,have insurance and signaling effects,which can increase the creditworthiness of private enterprises,provide credit protection for investors,transfer credit risk,increase the scale of bond issuance in the market,and provide new ideas and ways to alleviate the financing difficulties of private enterprises.Based on this,this thesis takes Tianshi Li Group as a case study to explore its "bond +CRMW" financing process and analyze its financing motivation.The thesis analyzes the financing cost through the cost of capital ratio,the short-term market reaction through the event study method,the financial status of the company through financial indicators,and the credit risk of Tianshi Li through the KMV model to investigate the financial effect of the "bond+CRMW" financing.The study shows that "bond+CRMW" financing can reduce the financing cost of private enterprises,expand the financing channels of private enterprises,improve the business conditions of enterprises,and reduce the credit risk of enterprises.Based on the findings of the study,the following suggestions are made: the scale of CRMW market should be expanded;the coverage of CRMW underlying bonds should be expanded to give full play to the market effect of CRMW;and the credit risk sharing mechanism of CRWM market should be improved.Finally,it is expected that this study can provide reference for the financing of other private enterprises and enrich the case application studies related to CRMW.