Legal Research On System Of China's Exchangeable Bond

In October 2013,China's first exchangeable bond(hereinafter referred to as "exchangeable bond")"13 Fuxing bonds" were formally listed on the Shenzhen Stock Exchange.China's exchangeable debt system finally moved from theory to practice.The birth of the exchangeable debt system has its special historical reasons.The main reason is to solve the problem of the fierce impact on the market caused by the“non-small” reduction in the shareholding reform.However,the market significance of the exchangeable bonds does not stop there.It not only enriches the specific types of corporate bonds in China,but also provides a brand-new way for the shareholders of listed companies to rationally manage their assets.Therefore,the exchangeable debt system was given high hopes at the beginning of its publication.However,the practice of issuance was not optimistic.With the successive launch of the market for exchangeable debt products,many problems have also been exposed.The main problems include the imbalance between risks and benefits of issuers,the lack of actual implementation of the holder's right to know,and the bond guarantee rules do not conform to traditional guarantee theory.This article attempts to start from practical cases and elicit the problems that may exist in the exchangeable bonds system.Then from the theoretical perspective of the exchangeable bonds,we analyze its basic concepts,legal nature,characteristics,institutional significance,etc.Finally,from a theoretical point of view,it responds to the real problems of the exchangeable debt system in a targeted manner and proposes corresponding improvements.This article is mainly divided into four chapters.The specific arrangements areas follows:The first chapter,through an in-depth analysis of the typical case of “15 Shibao01” for private placement of exchangeable bonds,this article studies its main terms and the final results of the issuance and brings forth practical problems in the practice of the exchangeable bonds,such as the imbalance between risks and benefits of issuers,the problem of bondholders' fragile right to know information,and the problems with bond guarantee guarantees that can be exchanged.The second chapter starts from the theory of the exchangeable bonds,analyzing the concept of the exchangeable bonds in accordance with the relevant provisions of the law,and giving an overview of the two existing public offerings and non-public offerings of the exchangeable bonds in the market.Analyzing the similarities and differences between the two in order to clarify China's exchangeable debt system.Of course,for the legal analysis of a system,we must first discuss its nature and characteristics.Through preliminary research,this paper believes that the exchangeable bond is fundamentally still the concept of “debt” in the civil law and is a kind of debt of choice.There are two ways to repay the exchangeable bonds: First,after the bond enters the conversion period,if the holder does not choose to exchange the bonds in the hands with the underlying stocks,the bond issuer must pay the principal and interest after the bonds expire.The debt can be repaid;Second,the holder chooses to convert the stock during the conversion period.At this time,the issuer needs to cooperate with the bondholder to complete the transfer of the stock transfer,and the bondholder obtains the stock and the debt can be paid off.This shows that regardless of the kind of payment,the bondholders have the right to request the bond issuer to do the specific behavior.The special feature of the exchangeable bonds is different from the traditional corporate bonds in that it is the possibility of embedding equity in the traditional corporate bonds and giving the bondholders the freedom to choose the right to exchange shares.The third chapter first introduces the historical background and practical significance of the exchangeable bonds to highlight its important role in the securities market today.Then we analyze the rights and obligations of the main subjects of the exchangeable bonds,including the bond issuer's rights and obligations and bondholders' rights and obligations.Subsequently we introduce the basic terms of the exchangeable bonds in order to better understand the institutional content of the exchangeable bonds.Finally,we conduct a comparative analysis of exchangeablebonds and convertible corporate bonds.There are many similarities between them,such as giving bondholders the right to choose.However,the difference is obvious.By comparing the differences,the advantages of exchangeable bonds compared to convertible corporate bonds are revealed.The fourth chapter is the proposal for the improvement of China's exchangeable debt system,mainly to respond to the relevant issues raised in this paper.The main recommendations are to appropriately reduce the issuance of barriers to entry,change existing guarantee rules,and further protect the rights of the bondholders.