Huzhou Nanxun Tourism Investment Company’s Credit Risk Analysis Of Municipal Investment Bonds

People generally believe that urban investment bonds are bonds endorsed by the government,as they have implicit guarantees from the government,high credit rating,and are a type of rigid redemption bond with no default risk.However,in recent years,due to frequent defaults on urban investment bonds,investors’ confidence has been greatly affected,and as a result,the credit risk of urban investment bonds has also begun to receive attention.In addition,starting from 2021,with China’s stricter regulation of implicit debts in urban investment bonds,the government’s dependence on urban investment bonds will also be significantly reduced,which to some extent increases the credit risk of urban investment bonds.In addition,the Party and the state have clearly stated in the 14 th Five Year Plan that preventing and resolving major risks is the main goal of economic and social development.How to effectively prevent and resolve domestic debt risks has also become a focus of common concern for all sectors of society.This article is based on the current situation and regulatory policies of urban investment bonds in China,and studies the credit risk of urban investment bonds that the current market is concerned about.This article first explores the influencing factors and mechanisms of credit risk in urban investment bonds from a theoretical perspective.Then,taking Huzhou Nanxun Tourism Investment Group Co.,Ltd.as a case study,it introduces the company’s basic situation and financing situation.Then,it qualitatively analyzes the credit risks it may face from three different levels: the issuer’s main body level,Using the F-model score method to measure,it was found that the overall financial risk of Huzhou Nanxun Tourism Investment Group Co.,Ltd.is relatively high,with poor asset liquidity and poor profitability quality.At the same time,there are also problems in the company’s operation and management,resulting in credit risk of urban investment bonds;At the local government level,the KMV model was used to predict the financial situation of the Huzhou Municipal Government in the next three years and calculate the probability of default.It was found that the probability of default occurring in the next three years is relatively low,but the probability is increasing year by year.Through comparison,it was found that there is a significant gap in the financial situation between Huzhou City and several other counties and districts,which is not conducive to the development of urban investment bonds.In addition,through analysis,it was found that the local government in Nanxun District overly relies on land finance,which also buries hidden debt risks for the local government,thereby increasing the risk of its corporate urban investment bonds;At the macroeconomic level,the impact of the epidemic has led to a global economic downturn,and the stricter regulation of urban investment bonds will also create potential credit risks for corporate urban investment bonds.Finally,this article draws inspiration from specific cases to better prevent credit risks of urban investment bonds,including improving the credit risk control system of urban investment bonds,enhancing the self hematopoietic capacity of urban investment companies,expanding their financing channels,improving internal control management systems,enhancing investors’ risk awareness,and strengthening the role of public and social supervision.