Problems existing in credit enhancement of collective bonds

The problems existing in the credit enhancement of collective bonds include the high cost of the enhancement tools, the use of the enhancement tools will affect the priority of the original creditors, and the effect of the enhancement tools will be affected by the credit rating and solvency of insurance companies.

1. The high cost of credit enhancement tools will increase the financing cost of the whole bond collection.

2. The use of credit enhancement tools will affect the priority of the original creditor and weaken its return to some extent.

3. The effect of credit enhancement tools is influenced by the credit rating and solvency of insurance companies. If something goes wrong with the insurance company, the credit rating of the whole bond collection will be lowered, thus affecting the interests of investors.