Research On The Financing Behavior Of Real Estate Enterprises’ Perpetual Bonds Under The Background Of "Three Red Lines" Policy

In August 2020,the central bank and the CBRC proposed the "three red lines" policy for real estate companies,which aims to further regulate the financing behavior of real estate companies and curb the growth of their interest-bearing liabilities,so as to effectively prevent the debt risk of real estate companies.According to the requirements of the "three red lines" policy,real estate enterprises that meet the line cannot increase their interest-bearing liabilities by more than 15% in the future,while those that do not meet the line will face more severe financing difficulties.In the background of the "three red lines" policy,real estate companies have taken measures to actively "downshift",some real estate companies issued a large number of perpetual bonds,perpetual bonds,a hybrid capital supplement tool that has both equity and bond status,in the process of "downshifting".This is a dual identity of equity and bond hybrid capital replenishment tool,which plays an important role in the process of "downshifting".However,there are also some enterprises that use the feature of "both equity and debt" to manipulate leverage in order to avoid regulation,which brings great risk to enterprises.Based on this,this paper selects Jinke,which has seen a significant increase in the number of perpetual bonds in recent years,as a typical case,and examines the motives of real estate companies in financing perpetual bonds under the background of the "three red lines" policy,whether they use perpetual bonds to manipulate leverage and the financial risks they face.Firstly,we analyze the financial risk of Jinke before the "three red lines" policy was issued,and find that it has unreasonable financing structure and low capital utilization rate."Secondly,to reduce the restriction on the use of funds and lower the scale of interest-bearing liabilities;thirdly,to enrich the cash flow and meet the needs of growth.Second,by analyzing the changes of the relevant regulatory indicators of Jinke under the background of the "three red lines" policy and the impact of dividing the perpetual bonds into equity and liabilities on the indicators of Jinke’s "three red lines",we found that Jinke used the perpetual bonds to increase its equity,and The financial statements showed unusual items,which led to the suspicion that Jinke had manipulated leverage by using perpetual bonds.The final in-depth analysis revealed,Jinke’s use of perpetual bonds to manipulate leverage has certain financial risks,such as liquidity risk due to the redemption of perpetual bonds,debt service risk due to the debt attributes of perpetual bonds,and erosion of corporate profits due to the jump in interest rates.