Case Study Of Star Group's Issuance Of Private Equity Exchangeable Bonds

Exchangeable bonds,which originated in 1970,are a subdivision of convertible bonds.In developed countries,their share accounts for more than 30% of the convertible bond market,and has been widely used and developed.The development history of China's exchangeable bonds is relatively short.The initial exploration began in 2008.At that time,the regulatory agency introduced the financial product in hopes of solving the "small and large" reduction of shareholding,but shelved it because of legal obstacles to the pledge of equity.It was only in 2013 that the first non-public exchangeable bond "13 Fuxing Bond" was issued,and in 2014 the first public exchangeable bond "14 Baogang EB" was issued.Innovative products such as exchangeable bonds were officially launched.In recent years,China's exchangeable bond market has developed rapidly,and more and more SMEs choose to issue private exchangeable bonds to solve financing problems.Based on reading a lot of domestic and foreign research literatures,this article takes the private placement exchangeable bonds issued by Xingxing Group as an example,and uses case study method combined with event research method to deeply explore the motivation and impact of its bond issuance.This article firstly writes the research background and significance,and secondly reviews the domestic and foreign literatures on the causes,terms and effects of private placement of exchangeable bonds.At the same time,the related concepts and theoretical foundations of privately exchanged bonds were elaborated,which laid the foundation for subsequent analysis.Then introduced the financial status of Xingxing Group and Crystal Optoelectronics and the whole process of bond issuance.Here we analyze the motivation of Xingxing Group's bond issuance,including low-interest financing,reduction of holdings and arbitrage.Then,from the four perspectives of the bond issuer,the underlying stock listed company,investors and small and medium shareholders,they explore the impact of bond issuance in detail and draw relevant conclusions.This article focuses on the analysis of the impact of the Xingxing Group's bond issuance on the price effect of Crystal Optoelectronics through the event research method,and also measures the investment profit and loss from the perspective of investors.This paper concludes that the issuance of private placement exchangeable bonds by the Star Group has achieved low-interest financing,reduced arbitrage and other multiple purposes,but it has a negative effect on the share price of Crystal Optoelectronics,and has damaged the interests of small andmedium-sized shareholders of Crystal Optoelectronics,and failed to achieve investment.The expected return of the person.Finally,based on the above conclusions,we get inspiration and make recommendations from the perspectives of issuers,investors,and regulators.This article chooses Xingxing Group to issue bonds as a research case because its initial bond issuance is low-interest financing,but it has also achieved partial arbitrage reduction.It is a successful issuance that can achieve the multiple purposes of the bond issuer and is worth promoting.This article not only enriches the literature of case studies on the causes and effects of privately exchanged bonds,but also provides a reference for companies preparing to issue privately exchanged bonds,encourages private companies to issue privately exchanged bonds,and warns investors to pay attention to related risks.