The 300th Wenlan Financial Forum

Abstract：

Under the background of the implementation of the registration-based system, this paper focuses on analyzing the bond market effects of lifting the hard constraint on the upper limit of the bond balance ratio (40%). Through descriptive analysis of the characteristics, it is found that with the lifting of the hard constraint of the 40% ratio ceiling, the bond balance ratio of bond issuers has increased significantly. About 8.1% of bonds are issued by companies with a bond balance ratio exceeding 40%, and the financing costs of these 8.1% bonds are lower. Empirical analysis conducted from the perspective of bond pricing characterizing the qualification of bond issuers reveals that compared with bonds with a balance ratio not exceeding 40%, bonds with a ratio exceeding 40% have lower credit spreads and smaller price differences between the primary and secondary markets, demonstrating higher pricing efficiency and quality of these bonds. Further analysis shows that bonds issued by companies that are sensitive to bond financing scale and high-quality (with high credit ratings, strong profitability, abundant collateral assets, and low business risks) have higher pricing efficiency. At the same time, these companies use bond financing more for business operations and investment activities, which in turn improves their business output and profitability, reduces bond default risks, and reflects the improvement of resource allocation efficiency in the bond market. The above results indicate that the lifting of the hard constraint on the 40% ratio ceiling will increase the enthusiasm of high-quality companies sensitive to bond financing scale to issue bonds, which not only increases the proportion of direct financing in the bond market but also improves the efficiency of resource allocation, thereby providing theoretical and empirical evidence for the regulatory authorities to continue deepening the reform of the registration-based system from different perspectives.

Speaker Introduction：

Wanfa Lin is an associate professor and doctoral supervisor at the School of Economics and Management, Wuhan University. He was selected for the Hubei Provincial "Young Top-notch" Talent Training Program (2022). His main research direction is issues related to the bond market and financial intermediaries. He has published several papers in academic journals at home and abroad, including "Economic Research", "Management World", "Financial Research", "China Industrial Economics", etc. He has presided over the general and youth projects of the National Natural Science Foundation of China, as well as the youth project of Humanities and Social Sciences of the Ministry of Education.