Pricing Basis Date Selection,Issue Size,Equity Refinancing Frequency And Directional Additional Issue Discount Rate

China's private placement market has been in full swing in recent years.In 2015,only listed companies that participated in private placements accounted for nearly 30% of A-shares in the same year.In 2016,the amount raised was 1.8 trillion yuan,which is more than 12 times that of IPOs.With the fierce development of the private placement market,the discount rate has always been high.From 2012 to 2018,the discount rate averaged 20.275%,much higher than the CSRC's requirement for the upper limit of the discount rate of 10%.The high discount rate brings about the problem of the transfer of interests of large shareholders and the encroachment of the interests of small and medium shareholders(He Xianjie et al.,2009;Zhao Yufang et al.,2011).On February 15,2017,the China Securities Regulatory Commission revised some of the provisions of the “Detailed Rules for the Implementation of Non-public Issuance of Stocks by Listed Companies”,and on February 17,issued the “Registration and Administration Questions and Answers – Supervision on Guiding and Regulating the Financing Behavior of Listed Companies” Requirements(hereinafter referred to as the new refinancing regulations).The new refinancing regulations impose restrictions on the pricing base date,issuance scale,and refinancing frequency of private placements.The direct consequence of the policy is that the average discount rate has dropped directly from 19.55% in 2016 to 10.25% in 2017.This raises the question,whether the new refinancing regulations have curbed the interest transfer behavior,that is,whether the new regulations will affect the discount rate,and what are the relationship between these factors and the discount rate.According to the literature in this paper,the discount rate and the market timing,the issue size and the frequency of equity refinancing are related.The market timing theory studies the relationship between market conditions,investor sentiment and discount rate;the scale of issuance is based on the theory of information asymmetry and the risk and liquidity compensation hypothesis affecting the discount rate.;the equity refinancing frequency affects the company's performance and market reaction,which in turn affects the discount rate.The pricing base date belongs to the market timing behavior,and the research on determining the pricing base date on the first day of the non-public issuance period has little effect on the discount rate;the selection of different indicators of the issuance scale is the conclusions about the impact of discount rate are also inconsistent;at the same time,there are fewer related literatures on the relationship between equity refinancing frequency and discount rate.This article is based on the introduction of new rules for refinancing,studying the relationship between the new regulations and the discount rate,further combing the factors affecting the discount rate,and improving relevant theories.This article focuses on three issues.First,can the discount rate be reduced on the first day of the non-public offering period? Second,what is the relationship between the issue size and the discount rate? Can the new regulations limit the size of the issue to reduce the discount rate? Third,does the frequency of equity refinancing affect the discount rate? Is the 18-month frequency limit significantly different in the discount rate? Therefore,this paper first sorts out relevant literatures,combs relevant literatures from four aspects: market timing,information asymmetry,equity refinancing frequency,and discount rate other influencing factors,and proposes relevant hypotheses.Then,through model design,variable selection,and conclusion based on empirical results.And give relevant advice.This paper selects the private placement data from 2012 to 2016 for 5 years.Finally,it is concluded that,first of all,the first day of the non-public issuance period as the Pricing base date does reduce the discount rate,which is consistent with the expected goal of the CSRC to guide the marketization of listed companies;secondly,the issue size does affect the discount rate.Moreover,the greater the scale of issuance,the higher the discount rate.Therefore,the CSRC's restrictions on the size of the issue have a substantial impact on the reduction of the discount rate.Finally,the lower the frequency of equity refinancing,the higher the discount rate,indicating that the CSRC considers this content when formulating the content.To excessive financing of money,but ignore its relationship with the discount rate,the policy ERFect may be compromised.Therefore,this paper suggests that the CSRC should pay attention to the financing characteristics of different companies while formulating the market for private placements,formulate targeted policies,and ERFectively regulate the private placement market to protect the interests of investors.