The Influencing Factors Of The Credit Spread Of Urban Investment Bonds

City investment company is a very active financing main body in the market.City investment bond,together with real estate bond and industrial bond,constitutes the three main types of bond in the bond market,with the implementation of the new budget law on January 1,2015,local governments have the right to borrow money,at the same time,the city investment company gradually began to break away from its status as a local government financing platform and began to operate as an independent enterprise as a legal person,gaining strong support from the policy and supervision,urban investment bonds have seen a spurt of growth since 2015.As the main body of issuing bonds,the city investment company has distinct characteristics and differences from other sectors.At present,the market thinks that the credit of the city investment company is endorsed by the credit of the local government,which is the so-called“City investment faith”,but regulators have repeatedly stressed that the government will not bail out the city investment’s debt,calling into question the role of government credit endorsements,at the same time,the government is gradually reducing subsidies and support for urban investment companies and encourage market-oriented reform.So the market for the urban bond credit spreads of what factors and whether these factors are changing.In the past,the research on the factors affecting the urban bond credit spreads often neglected the influence of time and bond types.2015 is the beginning of the explosive growth of urban bond,at the same time from this period,the main types of issuance gradually changed from corporate debt to corporate debt and debt financing instruments.The most difficult aspect in the research process is to first understand the actual situation of the bonds,and then through academic research to show.Therefore,the improvement of this paper lies in the first through practical experience and securities research to understand the actual situation,and then refer to the past literature for reference research methods.This paper starts with the factors that affect the bond credit spreads,and divides the factors into macro-level,regional level,subjective level and individual bond level,etc.,various explanatory variables are selected and their effects on credit spreads are explored.The conclusion of the study is that the significance and influence of explanatory variables are different for different credit-rated urban investment bonds,thus concluding that the underlying investment logic of different credit-rated bonds is different,for example,AA-rated bonds are more influenced by the fiscal situation of the region;AA +-rated bonds are more influenced by the indicators of self-employment;and AAA-rated bonds are more influenced by the movements of the bond market and the macro-interest rate market.At the same time,some suggestions are put forward for the benefit of city investment companies,local governments and investors,such as AA-rated bonds should pay attention to the mutual insurance and non-operational related transactions;AA + rated bonds should pay more attention to individual main business,interest-bearing liabilities,policy continuity;AAA-rated bonds should pay more attention to the interest rate market changes to ensure smooth financing channels.