Research On The Economic Benefits Of Issuing Sustainability-Linked Bond

As the economy enters a transitional stage,ecological environmental protection and high-quality economy have become the main development direction.In April2021,the Traders Association released the "Ten Questions and Ten Answers to Sustainability-Linked Bond(SLB)",which provides policy reference for domestic enterprises.Such bonds can not only meet the financing needs of enterprises that have not achieved zero carbon emissions,but also provide new financing channels for the low-carbon transformation of high carbon industries.However,the SustainabilityLinked Bond market is still in its infancy,with a small market scale and a single type of issuer,it is also worth paying attention to the effectiveness of such bond linked terms,whether they can motivate issuers to achieve performance goals,and how they affect their economic benefits.Therefore,studying economic benefits from the perspective of issuers can not only provide decision-making references for issuers to issue such bonds,but also provide policy recommendations to promote the development of this market,attract more issuers,and expand the market size.Based on reviewing relevant policies and literature,this article first introduces the connotation of Sustainability-Linked Bond.Secondly,this article selects two sustainable development linked bonds issued by Yangtze Power Corporation as the research objects: "21 Changdian MTN002" and "G22 Changdian 3".Based on the structure and characteristics of Sustainability-Linked Bond,this article studies its economic benefits,and evaluate the economic benefits with a factor analysis model.The research finds that in the short term,the issuance of Sustainability-Linked Bond can reduce the financing costs of enterprises,reduce the risk of fund term mismatch,and alleviate financing constraints,thereby increasing the scores of debt repayment and cost factors for companies,and also improving the overall economic benefits of enterprises;In the long term,the achievement of the linked target has improved the profitability of the enterprise,and the positive expectations of investors can also be sustained in the long run,so then increase the scores of profit and development factors.The enterprise’s valuation level is relatively high,but the scores of debt repayment,cost,operation,and value factors of the company have all decreased,leading to a decrease in overall economic benefits.Therefore,this article proposes suggestions for optimizing long-term economic benefits from aspects such as graded issuance of bonds,strengthening asset management and selecting linked targets.