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Summary of the development of China's corporate bond market

Author: WuJingQun From: www.yourpaper.net Posted: 2009-03-02 21:09:40 Read:
[Paper Keywords corporate bonds, corporate bonds credit rating market

[abstract] As we all know, whether corporate bonds can effectively play its financing and governance role, a significant positive correlation between the development of the corporate bond market its trading places. In recent years, China's corporate bond line are growing, but the development of China's corporate bond market is still lagging behind, many scholars put forward useful insights and policy recommendations. This, the paper selects some of the more typical literature review, this mainly involves the following research: the development of the corporate bond market in China must first distinguish between corporate bonds and corporate bonds, and secondly to cancel corporate bonds mandatory guarantee and improve credit rating system, In addition to promote the development of the bond market, focusing on the development of the national inter-bank bond market to enhance the liquidity of the corporate bond. This is the focus of current research.

to distinguish between corporate bonds and corporate bonds "
(A) One view is that corporate bonds can be divided from corporate bonds (Bingxi, 2007).
Logical analysis, corporate bonds is really a kind of corporate bonds; from the real needs of the corporate bonds from corporate bonds zoned out, do not need to re-establish a transaction circulation services specifically for the corporate bond market infrastructure, but to take full advantage of the existing facilities of the OTC market.
Bond issuers to determine the nature of the logical point of view, corporate bonds and corporate bonds are essentially the same type of bonds, and less in scope. This is because: on the one hand the company is one of the specific forms of enterprises, companies and enterprises connotation; On the other hand, of the Companies Act to allow state-owned enterprises in the form of company, therefore, the majority state-owned enterprises, the company is also more in our corporate bonds issued by state-owned enterprises. So it can be said that corporate bonds are an important part of corporate bonds. Real life, however, is much more complicated: first, there are some non-corporate bonds issued corporate bonds, such as railway construction bonds issued by the Ministry of Railways. Second, in the existing corporate bonds for the high proportion of project construction bonds used for operating purposes Bond proportion is too low. Third, from a regulatory point of view of the bond issue, the management of the corporate bonds issued by the National Development and Reform Commission. However, the number of listed companies to issue is managed by the China Securities Regulatory Commission. Corporate bonds due to the above reasons, it is neither possible to all corporate bonds are included, can not exclude certain non-real sense of corporate bonds. , Fundamental changes in the regulatory landscape is not the case in order to maintain the stability of the management structure of the bond market, corporate bonds from corporate bonds should be carved out: corporate bonds-Africa truly corporate credit bonds issued on the basis of non-listed companies bonds issued by project construction bonds issued for the financing for basic use, should remain within the corporate bonds; while the real corporate credit, the securities regulatory body under the supervision of listed companies issued by the operation of non-licensed business bonds, corporate bonds should be included in the range.
(B) Another view is that corporate bonds and corporate bonds must be discrete (Competitive Selection, 2007).
The Competitive Selection believe corporate bonds is essentially government bonds, not corporate bonds, but China will confuse corporate bonds and corporate bonds, the management system has seriously hampered the development of China's corporate bond market. So he thinks two bonds in the system, institutional and administrative departments relative separation, while retaining corporate bonds, corporate bonds and corporate bonds must be discrete.
New corporate bonds issued in the year 2006, for example, corporate bonds in the nature of the scope of government bonds: first, large issuers issuing bonds, which local businesses per issuers issued bonds of $ 11 billion, the central enterprises up to an average of more than 46 billion. Second, issuers basic state-owned enterprises, the vast majority of state-owned enterprises, a small part of the state holding listed companies. Third, bond funds almost all invested investment projects approved by the government departments. Fourth, the examination and approval department is not the bond market regulatory authorities, but the National Development and Reform Commission. Fifth, government credit support corporate bonds, the coupon rate is basically no difference.
True sense of corporate bonds, not corporate bonds, he believes there are mainly the following differences: First, the main issue of difference. Corporate bonds are bonds issued by the Corporation or a limited liability company, unincorporated enterprises shall not issue corporate bonds. China's corporate bonds are bonds issued by their respective institutions of central government departments, state-owned enterprises or state-controlled enterprises. Second, the difference of the use of bond funds. The main purpose of corporate bonds bond funds, including the investment in fixed assets, technology upgrading, and support of company mergers and acquisitions and asset restructuring. However, the use of corporate bonds in China's bond funds restrictions on investment in fixed assets and technological innovations transforming. Third, the credit-based differences. Corporate bonds based on their company's asset quality, operating conditions, the level of profitability and sustainable development capacity as credit basis. This is different from China's corporate bond is basically a government credit. Fourth, the difference of the control procedures. In the market economy, the issuance of corporate bonds usually implement a registration system, the bond market regulatory authority may require strict credit rating of the bonds and the issuers of information disclosure, and special attention to issue bonds after the market supervision. Our corporate bond issuance, the issuance of bonds by the State Development and Reform Commission and the State Council for approval, requiring the bank to be secured and after the issuance of the bonds, the examination and approval department information disclosure for issuers and market behavior oversaw.
In order to better develop the corporate bond market, he felt that we can no longer be confused with "corporate bonds and corporate bonds, while discrete corporate bonds and corporate bonds.
Whether it is a "division" or "discrete" and can be seen from the above analysis: China's corporate bonds in a sense, in fact, government bonds, government bonds issued on behalf of the enterprise. In this way, corporate bonds instead of corporate bonds, government bonds and then instead of corporate bonds, the result is the government is bound to strict approved the issuance of corporate bonds and take the mandatory security measures,. So, in order to issue corporate bonds in the true sense, but also note that: corporate bonds issued in 1993, Management Ordinance should be amended, and together with the clear provisions of this Ordinance does not include corporate bonds, which can be the root causes of discrete The two bonds, corporate bonds can not replace corporate bonds, in order to avoid government intervention in corporate bonds, in order to promote the development of the corporate bond market fundamentally.

two, you want to cancel the mandatory guarantee corporate bonds, and improve the credit rating system
Under the current provisions, corporate bonds must have state-owned banks, the central-level enterprises or national fund guarantee, which changes the nature of corporate bond credit products, investment of corporate credit risk evaluation into pairs guarantor (usually a bank) credit evaluation, on the one hand lead to the convergence of corporate bond credit rating, there is a market level (Yan Ju, Shi Lei, 2007); On the other hand, or the risk of corporate bonds focused on bank risk, there is not much difference between the risk of bank loans The bond market does not play the role of risk diversification.
Li Li (2006) that the government's mandatory collateral requirements generate a double moral hazard problem: moral hazard moral hazard issue bonds enterprises and investors, corporate guarantee and tend to invest in high-risk projects, investors secured There is no incentive incentive to use their own risk analysis ability to identify corporate and project risk information. And guarantees more, the greater the risk of debt issuance enterprise investment projects, an increase in corporate default probability. With guarantees investors identify risks and supervision of enterprise incentive to reduce the differences in risk identification ability of institutional investors and individual investors does not work in this case, weaken the institutional investors to identify and supervision issue bonds company enthusiasm.
The bond market can play a role in the risk diversification, to eliminate of debt issuance enterprise and investors, the risk of moral hazard, we have to cancel the mandatory guarantee. This mandatory guarantees, the company can only rely on their own credit to issue bonds, it would need a credit rating system to identify the company's credit rating, credit rating but also to guard against credit risk.
The credit rating is an independent third-party credit rating intermediaries creditors scheduled repayment of debt principal and interest in full capacity and willingness to be evaluated, and said its risk of default and loss severity (MA Yu Chao, Li Jizi, 2006) with a simple rating symbol. Make an objective, independent evaluation of the credit rating market credit risk, to help reduce investment risk, conducive to enhance the transparency of market information, and to promote fair competition, improve market efficiency (Lijian Yun, Tian Jinghai, 2006), to promote the development of the corporate bond market .
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