Research On Market-oriented Debt-for-equity Swap And Capital Structure Of Listed Companies

High leverage is the main cause of macro financial fragility,manifested as excessive debt in the real sector and excessive credit expansion in the financial sector.According to statistics,the total leverage ratio of China's non-financial sector was 248.8% in the first quarter of 2019,up 5.1 percentage points from the end of 2018,a relatively large increase.In order to effectively curb the "Grey Rhino" financial risks,the State Council issued the requirements of "opinions on actively yet prudently reducing the leverage ratio of enterprises" in 2016,marking the beginning of a new round of marketoriented debt-for-equity swap.According to preliminary statistics,by the end of April 2019,the signing number of debt-for-equity swaps had reached 2.3 trillion yuan,and 909.5 billion yuan had been invested.Debt-for-equity swaps had been implemented in 106 enterprises and 367 projects.The rapid reduction of corporate leverage ratio and the non-performing ratio of commercial Banks is the essence of the market-oriented debt-for-equity swap.However,the fundamental optimization of corporate capital structure and corporate governance is the connotation of market-oriented debt-for-equity swap.Finally,some countermeasures and Suggestions are put forward from the perspectives of government,financial institutions,market-oriented debt-for-equity enterprises and investors.The government should adjust the regulatory policy and improve the regulatory efficiency.Financial institutions should innovate the new mode of market-oriented debt-to-equity swap,and reconstruct the credit chain between Banks and enterprises.Enterprises should strengthen their overall sense and explore ways to get rid of difficulties through diversified reforms on the basis of market-oriented debtfor-equity swaps.Investors should not only see the development potential of the enterprises implementing the market-oriented debt-equity swap,but also consider the possible risks they may bring.Research shows that the reduction of corporate debt ratio is just a static result of debt-to-equity swap.In order to realize the long-term goal of optimizing enterprise capital structure,Firstly,this paper uses theoretical analysis method to study the path of market-oriented debt-for-equity swap affecting the ownership structure and debt structure of listed companies,there are both long-term and short-term impact paths.Secondly,this paper studies 34 listed companies that have implemented market-oriented debt-to-equity swap from September 1,2016 to December 30,2018.And takes the announcement date of debt-for-equity swap issued by listed companies as the event date,uses the random effect model to study the attitude of investors towards the implementation of market-oriented debt-for-equity swap,and then studies the short-term impact of market-oriented debt-for-equity swap on the ownership structure of enterprises.Thirdly,From the perspective of finance,the paper takes the market-oriented debt-forequity swap implemented by LuTianHua as a case to study the short-term impact of market-oriented debt-for-equity swap on the debt structure of enterprises.this paper concluded that in the short term,the expected value of the market and investors for listed companies to implement market-oriented debt-to-equity swap is declining.Although market-oriented debt-for-equity swap can immediately reduce the debt financing ratio,improve the equity financing ratio,the reaction from markets and investors remains negative.The implementation of market-oriented debt-for-equity swap has more or less positive effects on the solvency,operating capacity,profitability and growth capacity of enterprises in the short term.Therefore,the creditor's right structure of enterprises is changed.However,as a temporary and transitional means,market-oriented debt-to-equity swap can only bring the effect of "life extension" to enterprises,but cannot bring positive internal accumulation to enterprises immediately,so as to optimize the debt structure of enterprises.In the long run,enterprises that have implemented the market-oriented debt-to-equity swap still need to practice their internal skills,continuously enhance their innovation ability and strive to improve their governance level,so as to achieve sustainable development.