XY Company Private Bond Financing Case Analysis

In recent years, as an emerging market, China’s economic development is very rapid,especially domestic SMEs, the growth rate is striking. Therefore, as the cornerstone ofenterprise development-the demand for capital, especially the newly established high-techindustries. Among them, the bond market is an important part of the capital market is animportant channel for the direct financing of enterprises. However, due to the lack of effectivepolicy support, increase trust mechanism, a large number of SMEs can not be financedthrough the bond market.And private SMEs bonds has been widely used in Europe and the United States in thefinancing channels for SMEs, the private bond market to meet the diverse financing needs ofdifferent companies, an important supplement to the resource allocation function of publiccapital markets. Small and medium-sized micro-enterprises to broaden the financing channels,to service the development of the real economy, focus on supporting the development ofSMEs in countries approved by the State Council in2012, the Shenzhen Stock Exchange, theShanghai Stock Exchange launched the SME private bond financing, in accordance withrelevant laws and regulations rules, the introduction of relevant pilot management approach,standardized the private bond business for SMEs, and to protect the legitimate rights andinterests of investors.In the context of great efforts to develop direct financing channels for SMEs, theCommission timely introduction of private SME bonds. This can be an effective solution tosome small and medium enterprises financing difficulties "dilemma for the bond market,high-risk investment products. The SME private bonds, increasing the direct financingchannels for SMEs, to help solve the financing difficulties of SMEs, the problem of the highcost of financing. Private bond issue and transfer of certain limitations, and the SME privatebonds issued qualification relatively weak bond default risk, the issue of the design there is acertain degree of difficulty.Firstly, research, introduce the the XY company and the industry conditions, on the XYCompany issued the case of private SMEs bonds are introduced, from the private bondfinancing process, the sources of capital structure of enterprises, private debt risk and toincrease trust measures, private debt maturity and interest rate private debt to raise funds toinvest in aspects.Secondly, the analysis of the reasons for the choices of the XY private debt financing model, and analyze business activities after issuing bonds, and thus the cost of private debtanalysis, the issue of the interest rates and risk management of the private debt described andanalyzed, increase trust and propose measures to select and why, reasonable and there is aproblem, the issue of private debt in order to improve efficiency and risk control analysis ofthe XY private debt design from multiple angles.Finally, reveal the strengths and shortcomings of the SME private placement bonds, tooptimize private debt issuance program design, discuss the future direction of SME financingmodels, proposals for capital raising way help to promote the rapid development of SMEs.