City of Shenzhen - Credit Analysis
Feb 25, 2025
This was the final project for the UChicago Harris School’s Public Capital Markets Credential, which was hosted in Beijing, China, and co-sponsored by the Central University of Finance and Economics. Led by Professor Justin Marlowe, the program equips participants with essential analytical skills for public finance officials, including bond valuation, credit analysis, debt structuring and issuance strategies, and financial sustainability assessment.
Using the Circular of bonds provided by the City of Shenzhen, we applied a credit analysis framework and made a credit recommendation. We assigned the following weights to the assessment categories:
- 40% debt and liquidity
- 30% budget outlook
- 20% economy
- 10% governance
Finally, we considered sovereign anchor ratings—how the credit rating of the sovereign entity (China) should affect the rating given to the city of Shenzhen, given the fiscal dependence of the latter on the former.