The Study On Corporate Bond Financing And The Analysis On Creative Cases

The researches on bond financing are important parts of corporation financing theory, most of which are based on the western mature market environments. It is unavailable in Chinese market to apply the theory directly because Chinese market is an emerging one with the characteristic of transition economy. So the researches on Chinese corporation financing depend on two preconditions:one is the micro-structure of the corporation, the other is the institutional arrangements that corporation facing.This article studies the decision process of china corporation bond financing under the background of institutional transition. There are four parts in this article. Part one sets up a framework of bond financing for corporation. Part two draws some conclusions concerning the successfully institutional arrangement from the development of bond market in US and Japan. Part three analyses the institutional drawback that hinder the development of Chinese bond market. Part four studies some cases of Chinese listed companies concerning the debt product innovation which shows the rational decision process of listed companies on bond financing.According to the article, the current institutionally arrangements hinder the development of Chinese bond market through both the macro and micro channels. Firstly, the administrative approval of bond issue increase the cost and uncertainty of bond finance, which discourages the companies who want to issue bond. Secondly, the state-owned companies are easier to attain the approval of bond issue than the private companies because of the administrative authorities'preference on low default rate of bond. The state-owned companies have not too many incentives to issue bond due to their soft restraint, which limits the development of bond market from supply-side. Thirdly, the support framework for the bond market is underdevelopment. For example, the professional skill of the financial service intermediate, such as investment bank and credit rating agency is unsatisfying, the lack of financial instrument is difficult to hedge the risk in the bond market and the type of market participants is limited leading to the illiquidity of the bond market. Fourthly, the mispricing mechanism of stock market leads to the high IPO price, which makes the companies prefer the stock issue to the bond issue.While facing these obstacles, some market-oriented companies tried to make some innovations during the bond issue, which not only help these companies cut financial cost, increase the financial efficiency and attain the issue approval, but also promote the development of the bond market. The article chooses some typically successful cases and analyses the background and characteristics of the cases, which is helpful for the other companies to learn from the analysis.