An Analysis Of The Case Of Exchangeable Bonds Issued By Goer Tek Group

Since the issuance of the first private convertible bond "13 lucky debt" in October 2013,the number and scale of exchangeable debt have shown explosive growth.As of 30 months in September 2017,there were 165 convertible bonds in the market,with a scale of 162 billion659 million yuan,of which 158 were private exchange bonds,about 136 billion 959 million yuan.Although the adverse factors such as the upward trend of the market interest rate and the frequent credit risk,private convertible bonds have maintained rapid development.As of September 30,2017,59 have been issued,with a scale of 67 billion 299 million yuan,which has reached the scale of the year of 2016.In a few short years,exchangeable bonds have become the most market-focused bond-bond products,which are considered as an important investment variety and channel for bond investors to share stock market returns.Exchangeable bonds refer to the corporate bonds issued by the shareholders of listed companies who mortgage their stocks to the trusteeship institutions.The holders of the bonds can exchange the bonds held for the stocks of listed companies mortgaged by the issuer in accordance with the conditions agreed upon at the time of issuance of securities in a certain period in the future.The reason why exchangeable debt has become a highly respected financial instrument is that it can be widely used in the fields of financing,reduction,equity adjustment,merger and acquisition,and market value management.At present,many shareholders of listed companies pay more attention to the reduction function of exchangeable bonds.Compared with the traditional reduction of large shareholders,exchangeable bonds can be issued to obtain funds,the time for raising funds is shorter,and the reduction fund can be recovered ahead of time.Stocks that are still in the limited sale period can be used as the target for financing and inventory stocks can be revitalized.At the same time,the convertible bond gradually converts into stock during the convertible period,which has less impact on the stock price of the secondary market,and the reduction of the issuance of convertible bonds has less impact on the market image of issuers.By means of exchangeable debt,largeshareholders can indirectly reduce their holdings in order to achieve their respective purposes under the circumstance of circumventing regulatory restrictions.This paper combines theoretical research with case analysis,focusing on the analysis of the trigger,terms setting,accounting treatment,financial impact and potential risks of Goer Group’s issuance of exchangeable private equity bonds.Through the analysis of the trigger of its reduction,and then comparing with the traditional case of reduction,the paper concludes that the issuance of exchangeable private equity bonds can be exchanged.The advantage of the bond finally draws the impact of GoerTek group’s issuance of exchangeable bonds.