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2018•DEStech Transactions on Social Science Education and Human ScienceOpen access

Impact of Credit Rating on Issue Market of Short-term Financing Bonds in China

Jun ZHANG, Kai Zheng, Meng Ru Xu

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Abstract

The healthy development of the bond market is inseparable from the credit rating. In this paper, more than 1,000 samples of short-term financing bonds are chosen to set up a linear regression model for bond issuance pricing, which can be used to analyze the extent of the impact of credit rating on the cost of bond issuance. Model results show that the bond rating has significantly negative correlation with the issue spread. Therefore, it can be conclude that the rating results of Chinese bond rating agencies have significant influence in domestic bond market.

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What this paper is about

The healthy development of the bond market is inseparable from the credit rating. In this paper, more than 1,000 samples of short-term financing bonds are chosen to set up a linear regression model for bond issuance pricing, which can be used to analyze the extent of the impact of credit rating on the cost of bond issuance. Model results show that the bond rating has significantly negative correlation with the issue spread. Therefore, it can be conclude that the rating results of Chinese bond rating agencies have significant influence in domestic bond market.

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Available abstract

The healthy development of the bond market is inseparable from the credit rating. In this paper, more than 1,000 samples of short-term financing bonds are chosen to set up a linear regression model for bond issuance pricing, which can be used to analyze the extent of the impact of credit rating on the cost of bond issuance. Model results show that the bond rating has significantly negative correlation with the issue spread. Therefore, it can be conclude that the rating results of Chinese bond rating agencies have significant influence in domestic bond market.

Key concepts: Bond credit rating, Credit rating, Bond market, Bond, Business, China, Credit enhancement, Finance

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Impact of Credit Rating on Issue Market of Short-term Financing Bonds in China — Research Paper | ScholarLens