Corporation bond is a kind of debt lega l nexus, which is ma nifested by securities.The basic proposition of the lega l system of the corporation bond is designing the twomecha nisms. One is issuing corporation's convenient fina ncing mecha nism, the otheris protection mecha nism for debtor. From issuing to deadline, the regulation of therights and interest is core concept because of the change of the issuing corporation'scredit. We should design the lega l system to strike a bala nce between the protectionfor debtor and convenient fina ncing mecha nism for issuing corporation.Corporation bond aggregates crossing lega l relationship. Surrounding abovementionedviewpoint, this paper logic framework is conceived of as lengthways andtransverse thread. Beginning from the viewpoint that corporation bond is a kind ofcredit tool essentia lly, the paper designs the transverse thread by credit lega l system,which is property right foundation, credit service, oneself credit, credit disclosure ofcorporation bond's credit. The lengthways thread is the process of corporation bond'sissuing, circulating, existing, dying. In this process, the basic lega l relationship is civilcontract relationship. Hereby, bond indenture is the basic document adjusting everyparty interest. So the paper firstly analyzes the bond indenture in order to comma ndthe lengthways thread, secondly probes into the corporation bond's offering,circulating, thirdly probes into the supervision of obligatory right and the corporation governa nce. On the transverse thread, the credit redressing of corporation bond isregulate by law of bankruptcy and the lega l system of corporation bond has notspecia l provision, so is the dying of corporation bond on the lengthways thread.Therefore, the paper does not probe into these questions. At last, as an importantcategory of securities, the transverse credit lega l system and lengthways lega l systemall are regulated by government. Therefore the paper ends the government regulationof corporation bond.Except for the conclusion, the paper has eight chapters. The ma in ideas as follows :Chapter I is the introduction . This chapter firstly introduce the reason why choosethis subject, analyzing frame and research method. Legisla tion on corporation bond inour country is not perfect and lega l theoretic research about corporation bond isweakness. So the author chooses this subject. This paper does its best to analyze thelaw theory and give suggestion on the lega l system.This chapter then analyzes and compares these conceptions: corporation bond,corporation debt, enterprise bond, fina nce bond, securities market.At last, this chapter analyzes the lega l relationship aggregated on thecorporation bond in order to confirm this paper's research content. The corporationbond is a kind of equally voluntarily civil relationship. However, because of securities,it can be divided into two-la yer lega l relationship, that is the basic lega l relationshipand the securities relationship which is the commercia l lega l relationship.The'private'lega l relationship is intervened by government power, because theparties'strength, of the corporation bond, is great disparity, because the its'abroadcirculation. So the regulation lega l relationship is born. This paper probes into the civillega l relationship, commercia l lega l relationship, economica l lega l relationship,through the basic theory of civil law, commercia l law, economica l law. The macromeasurelega l relationship, the crimina l lega l relationship of the corporation bond isnot included by this paper.Chapter II. The corporation bond's credit. This chapter firstly probes into theconception, mea ning, lega l system of credit, then getting the conclusion that thecorporation bond is typica l credit carrier. Based on this conclusion, this chapter analyzes the property right foundation, credit service, credit guara nty of corporationbond's credit.The relationship of obligatory right and debt is the credit's prima ry content.Corporation bond is typica l credit carrier. The property right foundation of corporationbond is limited liability. The company law only permits the limited liability companyto issue the corporation bond in ma ny countries. Although it cannot improve thecorporation bond credit lever, the credit rating of corporation bond constitutes thecredit base by reflecting the corporation bond credit lever. As lega l action, the creditrating embodies the right and obligation of the three parties, which are rating servicecompany, issuing company and investors. The rating services company should keepindependence and neutrality. The credit rating of our enterprise's bond has ma nyshortcomings so that the risk of bond cannot be disclosed. We should set up creditrating supervised by prima ry bondholder. At the same time, we should standardize thecredit rating service industry.The credit guara nty of corporation bond reduces the credit risk and enhancescredit by the way of enlarging the obligation property and specia lize the obligationproperty. However, the issuing company cannot indirectly entrust the guara nty to thebondhold ers. The guara nty is entrusted to the trust company in virtue of trust law. Theguara nty is enacted by trust deed of issuing company and trust company which is theregistered oblige e.Chapter III. The contract theory: the basic jurisprudence of corporation bond.This chapter firstly analyzes corporation bond on the contract theory and incompletecontracts'view. Secondly this chapter analyzes the genera l articles and specia l articlesof the bond debenture.The issuing and circulating of corporation bond should comply with The GeneralPrinciples of Civil Law and Contract Law. As a kind of long-term and the parties'ineq uality contract, the corporation bond is an incomplete contract. Thus there is notonly the civil law theory but also the strict securities procedure rule and thegovernment regulation in the corporation bond lega l theory and system in order tofetch up the contract law's shortcoming. The bond indenture is the one promising every party's right and obligation anddisclosing the basic information. Once the bond indenture is authorized by theregulation department, it has the strongest authority. These genera l articles have beenclassified into freewill articles and necessary articles.The specia l articles are designed due to the conflict between creditor andshareholder. The specia l articles have following cla uses: restrictions on investmentcla use, restrictions on the firm's subseq uent fina ncing cla use, dividend constraintcla use, anti-dilution cla use, defeasance cla use, and so on.Chapter IV. The corporation bond's offering theory and system. This chapterfirstly probes into the issuing lega l character and lega l value. Secondly this chapterprobes into the qualification and procedure of public offering. The last section probesinto non-public offering system.The prospectus is offering invited document. The issuing company has the dutyof delivering the bond to the investors. Compare to the offering share, borrowing frombank, the corporation has higher efficiency.The procedure of enterprise bond has ma ny shortcomings such as crossingexamina tion, low efficiency, single-ma nner. The qualification of our corporationbond's offering has the affirmative condition, nega tivity condition and lega l duty ifoffering unlawfully. Our Securities Law and Company Law have some faultiness onthe qualification of corporation bond's offering. The public offering of corporationbond includes these steps: resolution about offering corporation bond by shareholdermeeting, making distribution contract and trust deed, applica tion, bulletining theprospectus, subscribing and handing in money, delivering bond.The non-public offering can reduce the expend iture and accelera te the procedure.We should establish our non-public offering of corporation bond from these aspects:qualification, quantity, the ma nner, the restrict ion on circulation.Chapter V. The lega l theory and system of corporation bond's circulation. Thischapter firstly analyzes the civil law theory and securities law formula. This chaptersecondly analyzes the problems in enterprise bond circulation market. At last, thischapter probes into how to set up corporation bond circulation market. Both the transfer of obligatory right and the transfer of the debt should abide bythe civil law. That mea ns that the transfer of the debt must be approved bybondholders. In the developed countries, if the debt need be transferred , there has thebondholders meeting, which takes a vote on the transfer of the debt. Otherwise, thedebt of this corporation bond cannot be transferred. In our practice, the issuingcompany often stipulated the condition of the transfer of the debt on"the investorspromising cla use"in prospectus. As a kind of securities, the transfer and circulationshould abide by the securities law. The transfer of corporation bond has these ma nners:endorse, discount, buy-back, centralized trading of securities at competing prices , uncentralizedtrading of securities, physica l deal, forward deal, margin deal, option deal.We should set up excha nge market, on the counter market. We should introducemarket maker system into the counter market. We should corporation bond consolida teregister and bala nce system.ChapterVI. The approach of corporation bond ma nagement. This chapter firstlyintroduces the two models of corporation bond ma nagement. One is the bondholdermeeting, the other is the corporation bond trusted. Then this chapter answers how tochoose the model. At last, this chapter probes into how to set up the system of thebondholder meeting and corporation bond trusted.There are two models of ma nagement of corporation bond: the bondholdermeeting and the corporation bond trusted. Our The Experimental Measure ofCorporation Bond Offering prefers to the corporation bond trusted. The author deemsthat we should adopt the two model and more emphasize particularly on thebondholder meetings.The disperse bondholders compose one of interest group. Nearly all of countriesaccept the interest group as a self-governed party: bondholder meeting. Thebondholder meeting is composed of all of bondholders. The bondholders can take voteon the business on advantages and disad vantages of the bondholders. The resolutionsof the bondholder meeting can restrict all of bondholders. The system of bondholdermeeting has these: the procedure and body of calling on. the content of resolution, theoperation and implement of resolution, the protection of minority bondholders. The author thinks the trust principle can suit to both non-guaranty and guara ntycorporation bond. The fid ucia ry relationship lies between the trustee and bondholders,not between the issuing corporation and trustee. The regulation department shouldsanction trust deed in order to protect bondholders.The last section of the chapter analyses the trustee's qualification, obligation,right according to the American law and the Japanese law.Chapter VII. The corporation bond and company governa nce. This chapter firstlyanalyzes the bond fina ncing has influence on the company governa nce. This chapterprobes into how to set up systems of the bondholder participation the issuing companygoverna nce according to the basic theory of the genera l creditor participation intocompany governa nce.The choice of fina ncing ma nner is a choice of the company governa nce. Thefina nce structure and quantity decides the apportion and transfer of company controlpower.Compare to the share fina nce, the bond fina nce has these influence on thecompany governa nce: non-dilution of the control, reducing the information disclosurestress, specia l function on fathering insider control, reducing the agent cost betweenshareholders and ma ngers, reflecting on the ma nagement of the issuing company. Andthe bond fina nce influence on the issuing company is different with the bank fina ncealso.The participation of the bondholders should adopt the collective group: thebondholder meeting. The trustee can appoint the director and supervisor into theissuing company. The bondholder's representative action also is an important approachfor bondholder participating the company governa nce.Chapter VIII. The research on the regulation of corporation bond market. Thetheory of regulation of securities market is suited to the corporation bond. Thecomplete system of regulation of corporation bond market should have these: theunifica tion of the regulation power, the information disclosure, the circulation marketregulation, the credit rating.Conclusion. This paper thinks that our system of corporation bond should focuson the investors'protection, giving attention on the fina nce efficiency. Precision and complete lega l system will impel development of our corporation bond market.
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