Study On The Debt Refinancing Of Chinese Listed Companies

For all of the enterprises, capital is the very important resource, because they have to face thefinancing problem. Different financing methods will lead to different capital structure, corporategovernance, corporate performance and development strategy. Since the Chinese securities market wasestablished, the refinancing method of domestic listed companies is even single, and the "heavy equityto debt" phenomenon exists for a long time. In China, corporate bond real start from the corporate bondissuance pilot approach on August14,2007. With the short-term financing bills and medium-term notesofficially launched, Chinese listed companies financing methods have been greatly broaden and theenthusiasm of debt refinancing has been significantly improved.The3th Plenary Session of the eighteen central committee explicitly proposed to develop andstandardize the bond market, and to improve the proportion of direct financing, the bond financing scaleof domestic listed companies has been rapidly growing. It is only142.4billion in2005, maintaining acertain proportion of the growth in several years, and it has exceeded2500billion in2012. The scalecontinues to keep a high level in recently years, and it has been more than2000billion during the firsthalf of2014. In addition, the average of the proportional coefficient of bond financing scale and theequity financing scale is2.94since2005. It shows that with the rapid growth of the domestic bondmarket and the increasingly innovation varieties, especially with the large-scale issuance of short-termfinancing bills and medium-term notes, the scale of bond issued by Chinese listed companies has beensignificantly beyond the scale of equity financing amount.The financing method has been one of the hotspots in the theory research, a large number ofdomestic and foreign scholars mainly focus on the comparison of equity financing and debt financing inrecent years. While among the many kinds of debt financing tools, different debt attribute exist fordifferent tools. The current study mainly analyzed the decision factors, comparative advantage andinternal mechanism between corporate bonds and bank loans, however, there is less study to analyze thedifferent debt financing tools, and even less study on the medium-term notes or short-term financingbills.Therefore, this paper will regard this as the breakthrough point, and study on the three main debtrefinancing tools (i.e. corporate bonds, medium-term notes and short-term financing bills).This paperwill focus on the debt refinancing options, the effect of stock price and corporate performance to thedebt refinancing behavior, so as to improve the financing efficiency and to enhance the value of thelisted companies. This paper tends to follow the thinking of “research background-review of literature andtheoretic-analysis of influence factors-announcement effect comparison-corporate performancecomparison-conclusions and recommendations”. This paper mainly combs the relevant literatureresearch and the western classical financing structure theory, and expounds the debt refinancingsituation of domestic enterprises, then investigates the influence factors of debt refinancing option bythe logistic judge model, analyzes the announcement effect of debt refinancing with event study method,and studies the influence factors on the company’s operation performance using factor analysis, andfinally gets the following conclusions:（1）The scale of bond issued by Chinese listed companies has been significantly beyond thescale of equity financing amount. While compared with the developed countries, the debt accounted forthe proportion of GDP is still at a low level, the domestic bond market still has a larger developmentspace.（2）There are significant differences among the related factors effecting the debt refinancedecision, and the company size, financial leverage and ownership concentration are the commoninfluence factors of the three debt refinancing methods. Compared to the paired companies, the samplesissuing corporate bonds, medium-term notes and short-term financing bills are of bigger size, bettergrowth, higher profitability and lower operation risk, while not better governance.（3）The announcement effect commonly exists in the event window, and it has positivecumulative abnormal return(CAR) before the announcement. Unlike most studies, the samples issuingcorporate bonds and short-term financing bills still get positive CAR after the announcement, while thesamples issuing medium-term notes get negative CAR. Additionally, there is a big difference betweenthe factors that influence the announcement effect, only the ROE is the common influence factor of thethree debt refinancing methods.（4）During the four years of refinancing period, the factor score of samples issuing corporatebonds increases firstly and then decreases, the factor score of samples issuing medium-term notes trendsto downward, and the factor score of samples issuing short-term financing bills shows the first declineslightly after rising trend. In addition, there are great differences between the factors affecting thecorporate performance of listed companies, only cash flow and debt to asset ratio are the commonfactors.