Research On Financing Scheme Design Of Baofeng Energy Convertible Bonds

The basic chemical industry is one of the important industries in China,which promotes the innovation of clothing,food,housing and transportation.The traditional basic chemical industry is generally faced with problems such as low-end overcapacity,high-end capacity shortage,high dependence on imports in some fields,serious pollution emissions and so on.With the industrial upgrading and the demand for green chemical industry,the basic chemical industry is facing a large number of long-term capital gaps.However,at present,companies in the basic chemical industry are generally facing financing problems,such as insufficient endogenous financing capacity;Highly dependent on bank loans and short-term loan term;The implementation rate of equity financing is low and the issuance cycle is long;High bond issuance cost and high rating requirements.These problems restrict the financing of basic chemical enterprises.Therefore,how to broaden the refinancing channels of basic chemical industry and meet the financing needs of long-term and high investment of basic chemical industry has important research significance.This paper chooses Baofeng energy,the leader of basic chemical industry,as the research object.Firstly,this paper analyzes the financing status of basic chemical industry and Baofeng energy.Secondly,select the appropriate financing methods.This paper summarizes the construction needs and characteristics of Baofeng energy project.Large investment,long cycle and high risk are its remarkable characteristics.On this basis,it compares the existing financing methods with convertible bonds through financing conditions,cost and risk,summarizes the limitations and problems of the existing financing methods,and analyzes the feasibility of Baofeng convertible bonds issuance.Secondly,it designs the financing issuance scheme of Baofeng convertible bonds.In this paper,the financing demand of Baofeng energy is predicted to be 3.322 billion yuan through GM（1,1）model.Based on the more debt biased characteristics of Baofeng convertible bonds,the specific terms of Baofeng convertible bonds are designed,and its theoretical value is analyzed through the modified B-S model.There are three conclusions: first,low issuing cost and long term are one of the advantages of convertible bonds.Compared with ordinary bond issuance,the requirements for subject rating are reduced,leaving room for companies with AA grade and below.Encouraged by the new regulations of refinancing policies,convertible bonds have higher implementation success rate and shorter issuance cycle than fixed growth.Therefore,the basic chemical industry can broaden refinancing channels through convertible bonds.Second,homogenization is common in China’s convertible bond market.Conditional resale terms are one of the reasons why convertible bonds are no longer cheap.Relaxing the design of resale terms is more conducive to the issuance of convertible bonds and improve the degree of differentiation of clause design.Third,the modified B-S model considering leverage effect,dilution effect and corresponding terms has certain adaptability to the convertible bonds issued by the basic chemical industry,and can effectively reduce the pricing deviation rate.Through the design of Baofeng convertible bond financing scheme,this paper aims to provide new refinancing channels for the basic chemical industry and increase the long-term investment in fine chemical industry and green chemical industry,and effectively improve the added value per unit output value and environmental protection efficiency.