Case Study Of X Company Sustainable Debt Financing

Sustainable debt is a kind of valuable bond with uncertain maturity time.Creditors can receive a certain amount of interest on a regular basis.As long as they have not expired,they can always enjoy the right to receive interest.Sustainable debt has the dual nature of stocks and bonds.It can be used as equity capital or as debt capital.The specific key depends on whether the terms of the issuance of perpetual debt include deferred interest payments and maturities.Sustainable debt is usually a new financing method in our country,but it has developed very mature in the world and is widely used in various infrastructure industries.Taking X Company,which has the largest number of perpetual bonds issued in the real estate industry,as the research object,this paper analyzes the operation mechanism and effect of perpetual bonds.Taking the change of financing environment of real estate enterprises and the unprecedented financing predicament of real estate industry as the background,this paper introduces the sustainable debt.From the theoretical point of view,we can find the essential features and mechanism of the perpetual debt by studying and analyzing the definition and nature of the perpetual debt from the development of the perpetual debt,and at the same time analyzing the financial,tax,and effect of the perpetual debt according to the relevant rules and regulations.New financing channels can be found for the real estate industry to solve the funding problem.In practical sense,the study and analysis of the operation mechanism,purpose and possible risks of perpetual debt can judge the advantages and disadvantages of real estate enterprises in the financing process,so that real estate enterprises can readjust the financing plan.In recent years,the issuance of sustainable debt in the real estate industry has become more and more large.Therefore,the study on perpetual debt in this paper can make the real estate industry obtain some valuable reference suggestions when issuing sustainable debt for financing.This paper makes use of the literature review method and case analysis method to summarize the advanced theory of perpetual debt at home and abroad.Taking the listed company X of the real estate industry as the research object,the paper analyzes the specific situation of sustainable debt financing.The paper focuses on the financial status of enterprises before the issuance of sustainable debt,the financial impact on enterprises afterthe issuance of sustainable debt,and the potential risks of enterprises after the issuance of sustainable debt.In the second chapter of this paper,on the basis of a brief introduction to the basic concepts,history,characteristics and distribution of perpetual debt,the theoretical basis of the financing of perpetual debt is combed out and commented on.The paper also expounds the existing literature and financing theory of sustainable debt financing at home and abroad.Based on the theory of agency cost theory,this paper uses MM theory,weighing theory,and optimal financing theory in modern capital theory.It is found that most of the existing research on perpetual debt in our country is limited to the theoretical level.It is not explained by actual cases,and it lacks comparison from the perspective of financing effect with other financing methods.The third chapter introduces the basic situation of X company and the financial situation from 2017 to 2018 after the issuance of sustainable debt.The problems that existed before the introduction of X company's issuance of sustainable debt include poor financial conditions,greater debt pressure,and high asset-liability ratio.Traditional loans are more difficult and other issues,as the main reason for X company to implement sustainable debt financing.The fourth and fifth chapters analyze the case of X company's sustainable debt financing,give a comprehensive description of the issuance process and the design of the terms of the perpetual debt,and analyze the financial effects and impacts of X company's sustainable debt financing and the potential risks of financing implementation.Chapter VI and Chapter VII summarize the implementation guarantees for X company's sustainable debt financing,clarify the conditions for real estate enterprises to issue perpetual debt,and adopt the plan for sustainable debt financing for real estate enterprises designed by the author.Let real estate enterprises understand the timing,content determination and process advancement of the implementation of sustainable debt financing,as its reference basis for sustainable debt financing.At the same time,according to the implementation of the effectiveness assessment and the use of funds and the implementation of risk avoidance,so that real estate enterprises to its financing plan to evaluate and adjust.