Analysis Of S Realty Company’s Real Estate Development Project Mezzanine Financing Case

From1998, China began to implement the reform of the housing system, real estatetransactions come into market, and it has become an important pillar of our economicgrowth after20years development.Real estate is a typical capital-intensive industries, it is essential to have adequatefunding support for real estate development. At present, China’s real estate corporatefinance mainly depends on bank credit (through indirect loans from financial institutions),the traditional way of financing has been difficult to meet the financial needs of real estatedevelopment, real estate corporate finance is facing unprecedented challenges and thisindustry urgently need to develop new financing channels.However, China’s capitalmarkets is under developed, it is very limited for real estate companies to obtain equityfinancing,which is leading to the birth of a new kind of financing-mezzanine financing.Mezzanine financing, as an intermediate product between equity and debt, with thecharacteristics of both equity and debt, in the form of flexible financing,has provided anew way for real estate business to get the financing under the macro-control policies.According to this,, the thesis researched on the mezzanine financing by taking the Sestate company for example. Combining the basic theory of mezzanine financing and theresults of some research at home and abroad, we drew some implications from mezzaninefinancing case of the S estate Company. Mezzanine financing,with the characteristics ofboth equity and debt, has changed the situation of the single financing channel for enterprise,not only address the needs of corporate debt funds, but also inject equity to enterprises andincrease the proportion of enterprise’ own funds level. Mezzanine financing has the positiveimport on the sustained and healthy development of the real estate business, and helps topromote the diversified development of real estate financial system.