A Case Analysis Of Exchangeable Bonds Issued By Baosteel Group

The bond market in China develops relatively weaker than the developed countries with many issues.For example, there are problems such as discontinuities, small scales,limited structure of bonds, and imbalance using of stock financing and bond financing Besides, with the completion of the stock reform, the non-tradable stock held by original holders will rush into the market and be negotiable. This would cause a damage to the stability and the healthy development of securities market. And with a large number of shareholders selling the stocks on hand, it may also has a negative effect on the confidence of investors.Currently,China's capital market is not enough mature with a imbalance development between stock market and bond market. For China, the establishment of mature capital market is the only way to develop.The key to improve china's capital market is the expansion of the bond market, gradually improve the structure of bond varieties, and accelerate the development of innovative bond derivatives and increase the size of issuance.And the appearance of exchangeable bond, a innovative combination of debt and equity, is appropriate. It can not only alleviate the impact of non-tradeble stocks to the market, but also help expand the scale of bond market issuance, and increase investable varieties, thus, playing a significant role in healthy development of the capital market,Overseas, exchangeable bonds grows very fast with many mature research on it.It is October 2013 when Wuhan Fuxing Biological Pharmaceutical Co., Ltd.successfully issued the first private exchangeable debt “13 Fuxing Debt",did we achieve a zero breakthrough.herefore,There are a few studies on exchangeable bonds in China,and most of them focus on the legal issues about exchangeable bonds.December 10th,2014, Baosteel Group issued “14 Baosteel Group EB" based on Xinhua issuance as the subject of the stock company, and then, exchangeable bonds in China lasted nearly six years finally entered the public offering stage.Based on the foreign experience and the actual situation of China, This paper analyzed the case of "14 Baosteel Group EB" issued by Baosteel Group. During the analysis, this paper uses many methods such as case analysis method and historical literature method. And by the analysis of the case,it gives some recommendations for improving exchangeable bonds market in China.