The Study Of Market-Oriented Debt-to-Equity Swap In China

In order to ease the debt pressure of non-finacial enterprises,in October,2016,the State Council in China issued?The guidance on market-oriented debt-to-equity swap in bank?,encouraging enterprises solve the high leverage through market oriented debt-to-equity swap.Contract with the administrative debt-to-equity swap in SOE(state-owned enterprise)reform in 1999,the debt-to-equity swap in this time would be oriented in marketization and legalization,and has proposed new view and requirement on the selection of the debt-to-equity enterprises,the proportion of stock transfer,the quality of equity shares and other various aspects.Yunnan Tin Group(Holding)company limited(YTG)is a participant both of previous and present debt-to-equity swaps,showing significant differences in the two processes,which cause different effects.This paper studies the debt-related theories,summing up the current situation of market-oriented debt-to-equity swap and analyzing the restricting factors of market-oriented debt-to-equity swap.Then taking YTG as an example,it foucses on the performance in the market-oriented debt-to-equity swap and finds out the priority of marketization degree and crossed debt-to-equity,also the challenges of fundraising slowly and the difficulty of equity withdrawal.In the end,through summing up the experience and revelation,I consider that the enterprises in market-oriented debt-to-equity swap should learn the advantages of YTG and put forword some suggestions like introducing credit evaluation system for these enterprises,lowering the standards of banks' capital adequacy ratio,establishing the transitional market of equity,for restraining factor of market-oriented debt-to-equity swap and so on.