| Construction companies are capital-intensive industries,they need to invest a lot of money in the early stage,and the product development process is relatively long.And it needs a steady stream of financial support,and the internal capital turnover is usually unable to meet its capital needs.Therefore,companies often need external financing to maintain normal business activities.If construction companies want better and longer-term development,raising a certain amount of external debt is indispensable.Undoubtedly,financial leverage will be higher and enterprises will face more severe risks.How to expand financing methods is a question that every management should investigate.Perpetual bonds have not developed for a long time in China.Under the continuous changes in the external economy and the continuous improvement of the financial market,perpetual bonds have already taken shape and maintained a rapid development trend,which is expected in the future.Perpetual debt is one of the mezzanine financing products.According to the legal level,although perpetual debt is called debt,it cannot determine a fixed maturity period.Theoretically,the publisher can use it indefinitely,and in most cases it is counted as "interest".At the end of 2013,Wuhan Metro Group was the earliest to test the perpetual bond,with a maturity of 5 + N,a total circulation of 2.3 billion,and a coupon rate of 8.5%.Since then,the perpetual debt has expanded significantly,especially for companies represented by Guodian Power,CITIC Pacific,China Railway Group and others.It is worth noting that in July 2014,China Railway Group issued medium-term notes externally,which was also the second perpetual medium-term note nationwide.The notes were handed over by a professional team to develop and promote them.At the initial stage of the issuance,the total financing scale of the notes was up to 3 billion After the fifth interest payment date,the issuer has the right to redeem the face value and increase the interest payable on each interest payment date.So far,the company’s perpetual debt has accumulated nearly 20 billion yuan,and in the process of issuing perpetual bonds,it can effectively reduce the pressure on enterprises.After seeing the profitability,other companies have joined the competitive landscape.After that,short-term perpetual bonds have been received by investors.After the eager pursuit of China’s bond market in 2013,it has developed rapidly and is worth investigating.First of all,this article explains the background and significance of perpetual bonds research,as well as its issuance,concept and development process.Next a brief description of China Railway Corporation,based on China Railway Corporation’s perpetual bond issuance example,analyzes the perpetual debt issuance plan,process,motivation,system,etc.Then based on China Railway’s development strategy and financial situation in recent years,theauthor analyzes the financial impact of China Railway’s perpetual debt issuance.Next the author analyzes the liquidity risk,profit risk,business risk and credit risk after issuing perpetual bonds.It also provided relevant guidance suggestions on how to prevent and control risks,and laid a certain foundation for the risk control and sustainable development of China Railway Group after the issuance of perpetual bonds.On the one hand,it can help the public investors fully understand the operation model of perpetual bonds,on the other hand,it conducts risk analysis on the perpetual debt issuers in the construction industry,provides a healthy development environment for perpetual debt financing,and thus promotes the sustainability of the construction industry.Development,at the same time,has a positive impact on the financial security of the financial market and operational stability. |
