Research On The Application Of Exchangeable Private Equity Bond Financing

The exchangeable bond is an innovative bond with many advantages,such as low financing cost,convenient process and small impact on stock price.This kind of bond provides a relatively lower cost and more convenient financing method,which is favored by many unlisted companies,especially those holding a large number of shares of listed companies.As of December 31,2019,China's capital market issued 274 exchangeable bonds with a total size of 212.251 billion yuan.Among them,the exchangeable bond "14 Ger bonds" issued by Ger group successfully raised 1.2 billion yuan and all completed the share swap,and became the first enterprise in China to combine exchangeable bonds with convertible bonds.Therefore,the financing case of Ger group issuing convertible bonds is quite typical and special.This paper takes the issue of private equity exchangeable bonds by Ger group as a case,and studies its motivation and economic consequences on the basis of reading a large number of domestic and foreign literatures.Firstly,This paper explains the research background and significance,reviews the domestic and foreign of exchangeable bonds on terms,release agent,market performance of literature research and illustrate the use of related theory.Secondly,it analyzes the reasons for Ger Group's issuance of privately exchangeable bonds,including such factors as financing,reduction of holdings,and profitability combined with convertible bonds.Then,it studies in detail the economic effects of Ger Group after issuing "14 Gore Bonds",Including reducing financing costs,improving capital structure,and obtaining huge returns.At last,the paper draws conclusions and Suggestions through case analysis: the major shareholders of listed companies can achieve multiple purposes by issuing exchangeable bonds,and they can make huge profits by combining convertible bonds with convertible bonds,but the most important is the stock price,which is not reproducible.At the same time,it is suggested that relevant enterprises learn from the experience of Ger group to relieve the financial pressure by issuing bonds that can be paid,and hope that the regulatory authorities can strengthen the supervision of the field of exchangeable bonds.