Case Analysis Of China Railway's Market-based Debt-to-equity Conversion

At present,China's economic development has entered a new normal state,mainly manifested in the three characteristics of economic transformation from high-speed growth to medium-high-speed growth,economic structure optimization and upgrading,and economic development driven by factor-driven,investment-driven and innovation-driven.At present,in the process of realizing economic restructuring and industrial transformation and upgrading,China has encountered the problem that the level of leverage of non-financial enterprises is too high and the financial burden is too heavy.Market-based debt-to-equity swap is one of the important means to reduce corporate debt levels and optimize financing structure.It also plays a role in promoting the reform of state-owned enterprises' mixed ownership and improving corporate governance.According to the situation of the market-oriented debt-to-equity swap funds since 2016,there has been a problem of large contracting volume and low rate of fund landing,which is inconsistent with China's current important task of preventing systemic financial risks.The article introduces the basic situation,financial status and policy environment of China Railway's market-oriented debt-to-equity swap,and explains the status and implementation basis of the market-oriented debtto-equity swap under the current environment.Then,by analyzing the necessity of China Railway's market-oriented debt-to-equity swap,it introduces the characteristics of enterprises that need to market-based debt-to-equity swaps,namely,industry important,short-term dilemma,and asset quality.Then it analyzes China Railway's market-oriented debt-to-equity swap from four aspects: implementation model,implementation organization,pricing strategy,and equity exit.It is believed that China Railway's market-based debt-to-equity swap can be successful mainly because the implementation model is in line with the actual situation of China Railway.The three types of implementing agencies can achieve complementary advantages,market-oriented pricing strategies,and a smooth equity exit mechanism.The successful operation of China Railway's market-oriented debt-to-equity swaps has brought three inspirations to the subsequent operation of market-oriented debt-to-equity swaps,mainly focusing on problem-oriented innovation,introducing multiple channels of funds to improve corporate governance,and various types of implementing agencies.Boost project funds.However,there are some limitations in the operation of China Railway's market-based debt-toequity swaps.For example,the sources of funds have a state-owned assets background,and there is a lack of pricing analysis of debt assets.Combining these inspirations and shortcomings,this paper gives some suggestions for the sound development of market-oriented debt-to-equity swaps,hoping to boost the market-oriented debt-to-equity swap funds,and thus prevent systemic financial risks,state-owned enterprise reform,and quality enterprises.The purpose of successful transformation and upgrading.