Abstract: Taking municipal investment bonds and city investing companies in China from 2010 to 2019 as the research objects, this paper examines the impact of the city investing companies’ absorption of private shares on their debt risks during the process of the mixed ownership reform from the bond level and firm level respectively. And it also conducts an in-depth analysis of the action mechanism of the mixed ownership reform in resolving the debt risks of the city investing companies from both the profit side and the asset side. The results show that the mixed ownership reform of the city investing companies can improve the credit rating of the bonds issued by the city investing companies and reduce the excessive debt ratio of them, thus alleviating the debt risks. Furthermore, the mixed ownership reform of the city investing companies reduces their debt risks mainly through improving the corporate performance and increasing the coverage rate of earnings over debts before depreciation and amortization of interests and taxes, rather than through increasing the coverage rate of tangible assets over the debts. Therefore, it is necessary to actively and orderly promote the mixed-ownership reform of the city investing companies and improve the performance of the city investing companies, so as to alleviate their debt risks and prevent and resolve the implicit debt risks of local governments effectively.

Key words: city investing companies, mixed-ownership reform, private holdings, debt risks