The Pricing Mechanism Of Debt-Equity Swaps On The Perspective Of State-Owned Assets Preservation And Appreciation

At present,China is in the critical period of economic transformation and upgrading.Due to cyclical and structural factors,there are still problems such as imbalance of supply and demand structure,low operational efficiency,heavy debt burden and excessive leverage.In order to prevent systemic financial risks,marketoriented debt-to-equity swaps came into being.In October 2016,the State Council officially issued the “Guiding Opinions on Converting Equity from Marketized Banks”,and the market-oriented debt-to-equity swap was officially launched.The Notice of Encouraging Relevant Institutions to Participate in Marketbased Debt-to-equity Swap,issued on November 13,2018,aims to encourage enterprises to participate in market-based debt-to-equity swaps,reduce the leverage ratio of the whole society and release market potential.However,since market-oriented debt-to-equity swaps have been launched,there are still problems of clear-cut real bonds and low enthusiasm for enterprise participation.There are many difficulties in the implementation mechanism.Therefore,it is of great significance to conduct research on market-oriented debt-equity swaps.This paper takes Changhang Phoenix Company as a case to study debt-equity swaps.On the basis of the company's stock price and the financial data disclosed in the financial statements,this paper firstly discusses the difficult of implementation mechanism,the design of the model in the implementation plan,the choice of value evaluation methods and the financial effects;Secondly,this paper studies State-owned assets preservation and appreciation from the perspectives of market value,security value and power value.The value assessment method and the formulation of the debt-to-equity swap plan will have a certain impact on the preservation and appreciation of state-owned assets.On this basis,this paper uses the option pricing model to study the pricing mechanism of debt-to-equity swaps,and analyzes the impact of three important factors,such as the ratio of stock-to-debt,the proportion of debt-to-equity swaps and the execution period on the effect of debt-to-equity swaps which provide basis for the formulation of the debt-to-equity swap plan.A reasonable debt-to-equity swap scheme can ensure the effective operation of corporate after debt-toequity swap.this can promote the preservation and appreciation of state-owned assets.Based on the above case study,this paper puts forward corresponding suggestions for the implementation plan and pricing mechanism of market-based debt-to-equity swaps.The property rights trading market should be more open and transparent,making asset pricing more fair and reasonable.The scope of thirdparty implementing institutions should be extended to investment companies,securities companies and trust companies and other financial institutions to avoid the occurrence of related transactions;Enterprises should combine debt-to-equity with other innovate financing model to improve corporate governance structure.