Research On The Motivation And Economic Consequences Of Enterprise's Market-oriented Debt-to-equity Swap

In the context of Chinese economic development entering a new normal and macroeconomic policies,the State Council issued the "Opinions on Actively and Prudently Lowering the Leverage Ratio of Enterprises" in 2016,which formally proposed market-oriented debt-to-equity swaps.The new round of debt-to-equity swaps are different from the first round of policy-based debt-to-equity swaps in all aspects of implementation,and it is determined by the market's independent choice.It will promote the improvement of my country's macroeconomic environment and the stability of the financial market.At present,the research on debt-to-equity swaps mainly focuses on the previous round of policy-based debt-to-equity swaps or essentially a comparative analysis of the old and new rounds of debt-to-equity swaps.However,with the development of the economy,the macro environment is becoming more and more complex.Debt-to-equity swaps have become an effective means for highly leveraged companies to get out of trouble.Therefore,this article selects YUNNAN TIN CO.,LTD.that have participated in two rounds of debt-to-equity swaps as a case,to study the motivations of corporate market-oriented debt-to-equity swaps and the economic consequences of debt-to-equity swaps.And then,Provide certain suggestions for the implementation of market-oriented debt-to-equity swaps in the future.This article first analyzes the current development status of market-oriented debt-to-equity swaps from three aspects: the factors affecting the implementation of market-oriented debt-to-equity swaps,the path of economic consequences,and the comparison of two rounds of debt-to-equity swaps;Then,through the introduction of the market-oriented debt-to-equity swap of YUNNAN TIN CO.,LTD.to analyze the motivation for the implementation of market-oriented debt-to-equity swap in YUNNAN TIN CO.,LTD.;Then after collecting relevant information and data,use the event research method,the financial analysis method and the free cash flow discount method to analyze the tin industry stock market-oriented debt The economic consequences after the conversion;Finally,supplemented by the comparative analysis of the economic consequences of the two rounds of debt-to-equity swaps of YUNNAN TIN CO.,LTD.to dig out effective information,in order to provide some suggestions for the implementation of debt-to-equity swaps in my country in the future.The research in this paper shows that the main influencing factors for the motivation of enterprises to participate in market-oriented debt-to-equity swaps are the promotion of national policies,the status quo and future development trends of the industry in which they operate,their own operating conditions and development potential,and the quality of creditors' s loans.Then,through the analysis of the economic consequences of the tin industry's market-oriented debt-to-equity swap,it is concluded that after tin industry shares participate in the market-oriented debt-to-equity swap,the market responds well,the solvency is effectively improved,and all profit indicators are equal improved.Compared with the previous round of policy debt-to-equity swaps,market-based debt-to-equity swaps perform better than policy-based debt-to-equity swaps in all aspects,but in the long run,some indicators show a slow development trend.In this regard,this article puts forward six suggestions from the three levels of implementation,operation and system.First,our country should continue to adhere to the marketization of debt-to-equity swaps in the future;Second,the government can purchase some small scattered debts to participate in the debt-to-equity swap while marketization;Third,the implementation mode of debt-to-equity swaps should be "adjusted to local conditions";Fourth,various financial institutions should be encouraged to independently participate in market-based debt-to-equity swaps as strategic investors;Fifth,the government should strengthen follow-up supervision while providing guarantees;Sixth,the relevant systems,laws and regulations related to debt-to-equity swaps need to be improved and improved.