The Analysis On Exchangeable Private Placement Bond Issuance By Haining Assets Management Company

On May 30,2015,Shenzhen Stock Exchange issued Notice on Matters related to Pilot Business of Exchangeable Private Placement Bond of Middle and Small-sized Enterprises which pointed out that exchangeable private placement bonds can only be exchanged for stocks ready for exchange within certain period after issuance.This is another product innovation and breakthrough in bond market of Exchange,meaning that enterprises can vitalize stock shares of listed companies' shareholders,providing new financing channels for listed companies' shareholders.As a new financial derivative instrument,exchangeable private placement bonds are applied by more and more middle and small-sized enterprises in China,but since exchangeable private placement bonds have a short development period in the country,so far understanding of exchangeable private placement bonds is still preliminary stage.Scholars at home and abroad have not yet make in-depth study on exchangeable private placement bonds and current study is mainly made on the basis of exchangeable bonds and private placement bonds.Given this,the paper puts emphasis on motivation,features of exchangeable private placement bond issuance by Haining Assets Management Company,influence on company capital institution,business performance of exchangeable private placement bond issuance and make suggestions on exchangeable private placement bond issuance based on living examples.This is not only in favor of investors to have a correct understanding of exchangeable private placement bonds,but also provide reference for financing by listed companies using the innovative financing method,exchangeable private placement bonds.The paper applies method of combining theoretical research with case study to analyze matters of exchangeable private placement bonds by middle and small-sized enterprises.In theoretical part,on the basis of review of research literatures at home and abroad,the paper mainly analyzes features,advantages and disadvantages,etc.of and influence on company capital structure and financial costs and company performance of exchangeable private placement bond issuance by listed companies.In case part,the paper takes an example of exchangeable private placement bond issuance by Haining Assets Management Company to analyze issues of motivation,features and economic consequences,etc.of exchangeable private placement bond issuance by small and medium-sized enterprises in China.The case study shows that:(1)exchangeable private placement bond issuance by Haining Assets Management Company reduces financing costs;(2)exchangeable private placement bond issuance by Haining Assets Management Company promotes operation performance;(3)exchangeable private placement bond issuance by Haining Assets Management Company optimizes capital structure;(4)exchangeable private placement bond issuance by Haining Assets Management Company is of reasonable term design.Therefore,the paper makes conclusions on successful experience of ultra short-term financing bonds issuance by company:(1)Choice of proper target company is guarantee of successful exchangeable private placement bond issuance;(2)Terms of share swap are important link for promotion of liquidity of exchangeable private placement bonds;(3)Good credit rating is the accelerant for exchangeable private placement bond financing;(4)Related departments shall strengthen control of information disclosure and risk of private placement bonds.Contributions of the paper mainly are:(1)analyzing of main motivation and features of and economic consequences for company of exchangeable private placement bond issuance by middle and small-sized enterprises in combination with true case in Chinese bond market,providing a case study on exchangeable private placement bond issuance by company in China;(2)setting out relatively detailed successful experience of exchangeable private placement bond issuance and matters needing attention;(3)providing reference case for exchangeable private placement bond issuance by small and medium-sized enterprises in China.The paper is divided into five chapters.Chapter I is introduction which reviews and summarizes research status of three aspects: motivation of enterprise exchangeable private placement bonds,pricing of exchangeable private placement bonds and problems existing during private placement bond issuance and influence on company wealth of exchangeable private placement exchange by scholars at home and abroad,pints out its inadequacy and puts forward research background and significance,research thoughts and method of the paper,and constructs a framework of whole paper.Chapter II is about basic theory of exchangeable private placement bonds,which at first introduces concepts and features of exchangeable private placement bonds,then discusses advantages and disadvantages of enterprise exchangeable private placement bonds and finally introduces regulations on exchangeable private placement bond issuance in China,laying a theoretical basis for analysis in the paper.The Chapter III is introduction to case of exchangeable private placement bond issuance by Haining Assets Management Company,which first introduces basic information of Company from business conditions and structure of assets and liabilities of Haining Assets Management Company,then introduces basic terms of scheme of exchangeable private placement bond issuance by Haining Assets Management Company in details.Chapter IV is analysis of reasons and effects of exchangeable private placement bond issuance by Haining Assets Management Company in which standard research method is applied to make analysis based on comparison of issuance reason and that of other financing methods and meanwhile based on information collected,comparative analysis approach is applied to analyze influence on company financing cost and capital structure of exchangeable private placement bond issuance by Haining Assets Management Company and change of business performance prior to and after issuance.Chapter V is conclusion and enlightenment of case of exchangeable private placement bond issuance by Haining Assets Management Company,in which conclusion of the paper is made with analysis above and suggestions on successful exchangeable private placement bond issuance by middle and small-sized enterprises are made.