A Case Study On Jin Ke Real Estate’s Perpetual Bond Financing

Since the 21st century,the real estate industry has risen rapidly and gradually become the pillar industry of the national economy.However,with the characteristics of excessive financing and long capital recovery period,the development of the real estate industry is extremely dependent on the finance,and has a pathological relationship with the social economy that "drives the whole body".In order to prevent possible systemic risks,relevant regulators have issued a series of financing policies for the real estate industry,forcing enterprises to develop new financing channels,reduce leverage levels and optimize the debt maturity structure.This thesis takes the perpetual bonds issued by Jinke in 2020 and recorded as equity instruments as the research object.On the premise of grasping the concept and definitions of the perpetual bonds,financing characteristics and corporate financing theory,this thesis conducts a case study on the issuance of the perpetual bonds in combination with the actual situation of the enterprise.Firstly,based on the operation and financing situation before the issuance of Jinke shares,this thesis analyzes the reasons for enterprises to issue perpetual bonds from three aspects: relevant policies,enterprise value and business needs;Secondly,collect relevant data and articles to introduce the issuing process,type selection and term design of Jinke’s perpetual bonds,and analyze the rationality of recording the perpetual bonds as equity instruments;Then it analyzes the financing effect of perpetual bonds from four aspects: financing cost,financial benefit,financial risk and market reaction;Finally,it summarizes relevant experience and provides practical suggestions for issuers on how to make reasonable use of perpetual bond financing.The conclusion is as follows:According to the relevant accounting treatment regulations and the design of issuance terms,it is reasonable for the perpetual bonds issued by Jinke Shares to be recorded as equity instruments;The financing behavior of perpetual bonds has played a role in reducing the financing cost of enterprises,optimizing the capital structure,broadening the financing channels and reducing the interest expenses;As for the possible financial risks,Jinke has effectively reduced the risk level by preventing and responding to them through small-scale issuance,paying high-interest principal in advance,and strengthening the ability of sales and payment collection;Through the event study method,it is found that the perpetual bonds issued by Jinke shares have no significant positive impact on the stock price.At the same time,the research in this paper also gives other enterprises inspiration for the financing of perpetual bonds: in order to make perpetual bonds an effective capital supplement tool and capital structure adjustment tool,on the one hand,enterprises should fully understand the current financing and operation situation,and determine the issuance scale,type,method and time of perpetual bonds in combination with the issuance motivation;On the other hand,it is necessary to predict the risk of perpetual bonds in advance,reasonably agree on the initial interest rate,jump interest rate and guarantee terms of perpetual bonds,take effective risk prevention and response measures,and maximize the positive effect of issuing perpetual bonds on enterprises and reduce risks.