Research On The Effect And Risk Of Perpetual Bond Financing Of G Company

With the successful issuance of China’s first perpetual bond in 2013,perpetual bond has gradually entered the public eye as a new financing tool.In 2015,in the macro context of the "deleveraging" policy introduced by the State owned Assets Supervision and Administration Commission,state-owned enterprises,especially high debt construction engineering enterprises,began to use the characteristics of perpetual bonds that can be included in equity instruments to issue a large number of perpetual bonds to achieve the goal of deleveraging and beautifying financial statements.With the continuous expansion and expansion of the perpetual bond market,as well as the continuous changes and improvements in national policies,the potential risks of perpetual bonds are also becoming increasingly apparent in the redemption boom of perpetual bonds.In the macro context of deleveraging by the State owned Assets Supervision and Administration Commission,this article selects G Company,which has a large issuance volume,multiple types of issuance,and is highly representative,as the research object.It uses case analysis,qualitative analysis,and quantitative research methods to explore the motivation,financing effectiveness,and risks of construction state-owned enterprises issuing perpetual bonds.Firstly,it introduces the research background,significance,content,methods,and innovative points of this article,summarizes the current research status at home and abroad,and briefly describes the relevant theoretical basis.Secondly,the current situation of financing in China’s construction industry and the overview of G company were described,and the reasons for G company’s perpetual bond issuance and financing process were elaborated in detail.Thirdly,from the four perspectives of financing cost,capital structure,financial leverage and financial income,this paper deeply compares and analyzes the effect of G Company’s issuance of perpetual debt financing compared with general debt Financing and general equity financing.Then,using the event study method,the short-term market response of G company after issuing bonds was evaluated,and the main financial indicators before and after the issuance of perpetual bonds were emphatically analyzed,supplemented by the horizontal comparison of the industry average and the financial indicators of state-owned enterprises(Sichuan Road and Bridge)in the same industry that did not issue perpetual bonds.At the same time,combined with the non-financial performance of perpetual bond financing,the financing effect of G company’s perpetual bonds was comprehensively evaluated.Finally,based on the current financing situation and the latest policies,the risks of sustainable bond financing were analyzed,and targeted measures to prevent risks were proposed.This article provides useful exploration for innovative diversified financing methods for enterprises,improving their financial performance,and preventing financing risks.It can further enrich the theoretical research of perpetual bonds and provide reference for other enterprises that issue perpetual bonds to broaden financing channels.