First of all, the establishment of corporate bond trust is the objective need of the essential characteristics of bonds. Corporate bonds reflect the relationship between creditor's rights and debts, and the essential feature of bonds is repayment of principal and interest. The biggest risk faced by bond investors is that the borrowing company cannot repay the principal and interest as scheduled. Therefore, repayment guarantee has become the primary factor for investors to consider when making investment decisions. As a form of creditor's rights and debts, investors in corporate bonds must also demand mortgage security rights. However, corporate bonds are different from bank loans, and their creditors are not one person, but unspecified public investors. Not only are they numerous and scattered, but future creditors are in flux due to the circulation and transfer of bonds, which leads to the question of who holds and exercises the mortgage security right provided by borrowers. In order to avoid risks, investors' demand for mortgage guarantee becomes a hard premise for the formation of creditor-debtor relationship, and the dispersion and liquidity of investors make it difficult to implement the mortgage guarantee provided by borrowing companies. To solve this contradiction, an institution is objectively needed to master and exercise the mortgage security right of decentralized creditors. Corporate bond trust's original design was caused by this. Trust companies have natural advantages in solving the mortgage guarantee contradiction between borrowing companies and diversified investors.
Second, the corporate bond trust has established an effective mechanism to protect the interests of investors. The degree of protection of investors' interests marks the development and perfection of the securities market. Corporate bond trust is an institutional arrangement aimed at protecting the interests of investors, focusing on the effective implementation of mortgage security rights and avoiding liquidation risks. This system will protect the interests of investors before, during and after the debt of the whole company. Before issuing bonds, the trust company shall examine the legality and feasibility of issuing bonds by the borrowing company, as well as the company's operation, financial status and credit rating; Before the debt expires, the trust company holds the mortgage right to dynamically monitor the mortgaged property, maintain the value stability of the mortgaged property and ensure its solvency; When the bond expires, if the borrowing company fails to repay the principal and interest as scheduled, the trust company is responsible for auctioning and selling the collateral to pay off the creditor's rights, so that the rights and interests of investors will not be lost.
Third, corporate bond trust facilitates the issuance of debt companies and helps to improve the issuance efficiency. Corporate bonds refer to bonds publicly issued by borrowing companies to raise funds. Ordinary borrowers cannot issue bonds independently. First, due to the extremely complicated issuance procedures and related affairs, professional institutions are needed to provide services, and the relevant systems in various countries restrict the independent issuance of public bonds; Furthermore, because corporate bonds can only be widely sold to the society if they are trusted by the public, if the issuing company declares its legitimacy and credit stability, it is not conducive to winning the public's trust and making the bonds sell well. As a reputable financial institution, a trust company can confirm the legitimacy of the loan and the credit of the borrowing company from the perspective of a third party, which will help win the trust of the society and investors, thus promoting the smooth issuance of bonds. At the same time, as a professional institution in the securities market, trust companies can also provide a number of issuance convenience services for debt companies, which can improve the issuance efficiency.
Fourth, corporate bond trust has created a win-win market-oriented operation mechanism. Corporate bond trust is an interest-driven market-oriented operation mechanism, which excludes government arrangements and constraints and is the active choice of debt companies, trust companies and investors driven by the interest mechanism. Through trust companies, scattered investors are organically linked with debt companies that borrow huge amounts of money, and a win-win effect is achieved on the premise of ensuring the interests of all parties. The borrowing company wins the trust of investors by providing effective mortgage guarantee, and can successfully achieve its financing purpose; Investors can rest assured that their investment will be profitable because of the existence of mortgage guarantor; Trust companies have been active and prosperous in the bond market because of the increase in underwriting and underwriting business income.