Research On Market-oriented Debt-to-equity Conversion Of China's Commercial Banks

With the further advancement of China's economic reforms and in order to meet the requirements of supply-side reform policies,the Chinese government has also begun to introduce relevant policies and regulations to reduce leverage and capacity.In October 2016,the State Council issued a document encouraging enterprises to adopt market-based debt-toequity swaps to reduce leverage,which clarified the way and principle of China's new round of debt-to-equity swaps,and it also marked the start of market-based debt-to-equity swaps.This is completely different from the previous round of policy-based debt-to-equity swaps.This debtto-equity swap has a market-based concept that includes operational models,funding sources,pricing methods,and equity exits.This paper uses the method of special research to study the market-oriented debt-to-equity swap and its pricing dominated by commercial banks.The research content of this paper is divided into the following five parts: The first part is the introduction,which mainly describes the research background and research significance of the paper.The second part is theoretical research,which mainly introduces the meaning of market-oriented debt-to-equity swap and its pricing and a series of related theories.The third part analyzes the status quo of market-based debt-to-equity swap and its pricing in China's commercial banks.The fourth part is the focus of the article,mainly on the design of pricing mechanism,which is divided into credit pricing design and equity pricing design.In the design of credit pricing,a market-based bidding mechanism was introduced and a credit evaluation system for debt-to-equity swaps was designed to help complete the pricing of creditor's rights.In the design of equity pricing,the concept of creditor's rights was introduced to design creditor's rights as a factor affecting equity pricing.Finally,the two pricing are integrated into a complete commercial bank market-based debt-to-equity pricing mechanism and a case study is introduced.The fifth part is the conclusion of the full text and related suggestions on pricing and the implementation of the market-oriented debt-to-equity swap of commercial banks in China.This paper analyzes and studies the market-oriented debt-to-equity swaps led by commercial banks,and proposes new ideas and redesigned pricing mechanisms.It intends to provide new ideas for the future pricing of debt-for-equity swaps between commercial banks and enterprises,and give some suggestions on promoting the development of market-oriented debt-to-equity swaps.