Case Analysis Of Exchangeable Bonds Of Mu Yuan Group

Exchangeable bonds refer to the bonds issued by the shareholders of the listed company by mortgaging their own shares in the listed company.The holder of a exchangeable bond can convert his bond into shares of a listed company at a later date.In the 1970 s,the concept of exchangeable bonds was formally introduced in the United States,and the concept of exchangeable bonds was formally introduced in China in 2008,marked by the "Trial Provisions on the issuance of exchangeable corporate bonds by shareholders of listed companies" issued by the Securities Regulatory Commission on October 17 of that year,but due to the unsoundness of China's legal system and related mechanisms,exchangeable bonds have not been truly recognized by the market.With the development of China's multi-level capital market and the introduction of a series of laws and regulations and relevant regulatory rules,in 2013,China's first exchangeable bond was successfully issued.Since then,the quantity and amount of exchangeable bonds in China are increasing rapidly,and the exchangeable bonds are welcomed by investors because they have the attributes of both stock and bond.As a new type of financial derivative instrument,exchangeable bonds have many functions,such as low-cost financing,high-premium selling and so on,the issuer can also flexibly set the specific terms of the exchangeable bond according to its issuing purpose,and the exchangeable bond is favored by the issuer because of its characteristics.The rapid development of private enterprises can promote the rapid growth of China's national economy.In addition,the good development of private enterprises can also increase tax revenue and create jobs in China,and the lower issuance requirements of exchangeable bonds can just provide a new financing channel for private enterprises that are not listed on the stock market,to a certain extent,to ease the financing problems of private enterprises.This paper studies the case of exchangeable bonds issued by Muyuan Industrial Group,and puts forward relevant suggestions on the basis of comprehensive analysis,hope to be able to adjust the debt structure and reduce the cost of financing for other listed company shareholders to provide a reference.Thewriting methods used in this paper include literature analysis,financial analysis,Case Analysis and empirical analysis.The content is divided into five parts,and combed the relevant literature of exchangeable bonds.The second part of the concept of exchangeable bonds,definition,characteristics and the theoretical basis of bonds were introduced in detail.The third part is the case summary of Muyuan industrial group issuing exchangeable bonds.This part mainly introduces the basic situation of Muyuan industrial group and Muyuan stock,it also introduces the process of Muyuan Industrial Group issuing exchangeable bonds,the process of muyuan shares' directional additional issuance and the issuing results of exchangeable bonds,this paper reveals how Muyuan Industrial Group realizes arbitrage through directional additional issue and the coordination of exchangeable bonds.The fourth part is the case analysis part,this part first analyzes the motivation of Muyuan industrial group to issue exchangeable bonds from the aspects of bond clause setting,Issuer's financial status,equity investment,financing method and issuance timing,etc.,this paper analyzes the effect of the issuance of bonds from three aspects: the capital structure of the company,the ability of paying debts,and the ability of earning profits,this paper applies Monte Carlo simulation method to pricing the bonds issued by Muyuan Industrial Group,and judges the possible exit ways of the bonds according to the relevant terms of the bonds issued,through repeated simulation,the theoretical pricing of bonds and the exit times of various exit ways are obtained,and the deviation between the theoretical price and the issue price as well as the difference between the simulated exit ways and the actual exit ways are analyzed.The fifth part is revelation and suggestion.On the basis of the above analysis,some conclusions are drawn and some suggestions are put forward to provide reference and guidance for other enterprises issuing convertible bonds.The suggestions put forward in this paper are as follows: for Issuers,they should consider not only the purpose of issuing,but also the release period of stocks,the regulation of capital operation and the commitment of reducing stocks;For investors,they need to pay full attention to the potential risks of exchangeable bonds and choose the investment varieties that match their own risk preferences.For the relevantregulatory authorities,they need to improve relevant laws and regulations as soon as possible,improve the information disclosure requirements of issuers,better protect the interests of investors,thus further promote the development of the exchangeable bond market.