Time: May 10, 2023 15:00-16:30

Conference ID: # Tencent Conference ID: 563-851-264

Reported by: Lin Wanfa, Associate Professor, School of Economics and Management, Wuhan University School of Economics and Management

Reported by:

Lin Wanfa. Associate professor and doctoral supervisor of the Accounting Department of the School of Economics and Management of Wuhan University School of Economics and Management, who was selected into the "Youth Top" Talent Training Plan of Hubei Province (2022). The main research direction is related to the bond market and financial intermediation, and the research results are published in domestic and foreign academic journals such as Economic Research, Management World, and Financial Research. Relevant achievements have won the first prize of excellent papers of the Chinese Accounting Society of the Ministry of Finance, the second prize of excellent research achievements of the China National Intellectual Property Administration, and the second prize of excellent achievements in social sciences of Hubei Province (ranking first), and presided over the Youth Project of the National Natural Science Foundation of China and the Youth Project of Humanities and Social Sciences of the Ministry of Education.

Introduction to report content:

This article uses the Wind database's urban investment bond issuance and manually collected AAA professional guarantee institution establishment data to explore how guarantee resources affect urban investment bond issuance and its debt rollover risk resolution. Research has found that the establishment of AAA professional guarantee institutions is beneficial for increasing the issuance amount and quantity of urban investment company bonds. In terms of mechanism, AAA professional guarantee institutions mainly assist in the issuance of urban investment bonds by increasing regional guarantee resources, manifested by an increase in the proportion of guaranteed bonds. The results of bond level data show that the newly increased rating guarantee resources mainly achieve the rating threshold by improving bond rating and promoting reasonable pricing of bonds, while protecting investors in the bond market and improving the participation of investors in the Primary market to help urban investment bond issuance. Heterogeneity analysis found that the promotion effect of AAA professional guarantee institutions on urban investment bond issuance is more significant in provinces with scarce guarantee resources, high debt risk, and high financial pressure. Therefore, local governments can assist in the issuance of urban investment bonds by establishing high rated guarantee institutions, and reduce the risk of debt rollover for urban investment companies by borrowing new and repaying old (exchanging time for space). Further analysis shows that from the perspective of bond issuers, the main sources of new guarantee resources are those who have not yet issued bonds and those who have chosen to provide guarantees with poor ratings. AAA professional guarantee institutions mainly revitalize the urban investment bond issuance market by increasing credit for less qualified entities. From the perspective of guarantee resources, the proportion of general guarantee institutions' business occupied by AAA professional guarantee institutions is filled by qualified bond issuers. AAA professional guarantee institutions have not had a crowding effect on the overall guarantee resources while enriching the guarantee resources in the region. Therefore, the newly added guarantee resources and existing guarantee resources have achieved hierarchical complementarity.

(Undertaken by: Accounting Department, Research and Academic Center)