Research On The Motivation And Effect Of Poly Development’s Green Medium Term Note Financing

With China’s economic development and accelerated urbanization,the real estate industry is also developing at a high speed.The real estate industry is a typical capital-intensive industry,and real estate enterprises have a large and frequent demand for funds in the development and construction of land reserves and subsequent projects.However,with the economic downturn in China,as the relevant policies on real estate are also being tightened,the existence of difficulties in property sales and other situations make the capital chain of real estate enterprises may break at any time.In addition,as China’s real estate was in the stage of brutal development in the past decade,there were non-conforming behaviors of real estate enterprises in the process of project construction,which caused environmental burden.In such a development context,real estate companies in China are in urgent need of new financing methods to alleviate the capital problem and to solve the problems caused by the real estate industry in the environment.This paper takes the green medium-term notes issued by Poly Development as the research object to find a breakthrough for the financing problem.Firstly,we introduce the current market development of green medium-term notes in China,and then we analyze the basic situation of Poly Development.The analysis reveals that Poly Development has a good overall performance,and its property sales maintain a growing trend,with a good debt structure and strong green development capability.On this basis,the motivation of issuing green medium-term notes was analyzed,and the effects,problems and risks of issuing green medium-term notes were further analyzed based on financial indicators and the event study method,and the following conclusions were obtained: China’s green-related policies and the support of the company’s strategy largely promote the issuance of green medium-term notes by Poly Development;Poly Development has the advantage of financing cost by issuing green medium-term notes,and can adjust the capital structure and reduce the risk of green development.The issuance of green medium-term notes has the advantage of financing cost and can adjust the capital structure and reduce the risk of risk mismatch;moreover,the issuance of green medium-term notes has many benefits such as improving the company’s reputation and contributing to the optimization of the environment.However,the company’s green medium-term notes issue still suffers from imperfect information disclosure,low investor willingness to invest,high implicit costs of issuance,and the absence of a risk mechanism.Based on the findings of the study,this paper first proposes recommendations on the problems of the green medium-term notes issued by Poly Development,and then gives insights from the corporate and regulatory levels,aiming to provide reference and reference for the issuance of green bonds by enterprises and promote the further development of green bonds in China.