At the same time, the author learned that Yang Xiaojia, chairman of the National Equities Exchange and Quotations, revealed during a survey in Ningxia that in the next step, the National Equities Exchange and Quotations will further increase its efforts, gradually improve market functions, and develop financing methods such as convertible bonds, private equity bonds for small and medium-sized enterprises, and preferred stocks. form to provide financing services for listed companies.
The China Securities Regulatory Commission has recently studied and deployed specific measures to implement the State Council’s opinions on taking multiple measures to alleviate the problem of high financing costs for enterprises, including that the issuers of private placement bonds for small and medium-sized enterprises will be expanded to companies listed on the National Equities Exchange and Quotations to better support the financing of the majority of small, medium and micro enterprises and further broaden the financing channels for small, medium and micro enterprises.
Zhu Lixu, a macro strategy researcher at the Xiangcai Securities Research Institute, said in an interview: "Allowing New OTC companies to issue private placement bonds of small and medium-sized enterprises has expanded a new financing channel for listed companies. In addition to equity financing channels, listed companies can also raise funds through private placement bonds of small and medium-sized enterprises. The expansion of fund-raising channels is the biggest benefit for listed companies; at the same time, it also provides a new way for investors. Investment tools have enriched investment varieties. "
However, Zhu Lixu also emphasized that compared with the private placement method of listed companies, private placement bonds of small and medium-sized enterprises have greater costs for enterprises. In particular, private placement bonds are high-risk and low-credit varieties, which requires enterprises to compensate investors for their risks with higher interest rates, which will increase the interest cost pressure of enterprises, especially in the context of cash flow shortages when enterprises are in the research and development stage. Interest pressure will be even greater. However, equity financing methods such as private placement may be more suitable for the development of small and medium-sized enterprises, and may be the best financing method for small and medium-sized enterprises, especially in terms of sharing risks with investors.
Data show that as of the end of July 2014, the pilot area for small and medium-sized enterprise private placement bonds has covered 29 provinces (autonomous regions and municipalities directly under the Central Government) across the country. The Shanghai and Shenzhen stock exchanges have accepted a total of 683 enterprise registration applications, with a planned issuance amount of 125.1 billion yuan and an actual issuance amount of 68 billion yuan.
As far as the author understands, there is no administrative license for small and medium-sized enterprise private placement bonds, a filing system is adopted, and there are no financial indicator requirements. Investors and financing parties are encouraged to negotiate independently in terms of capital costs, credit enhancement and rating arrangements, and dispute settlement mechanisms. Thanks to this market-oriented institutional arrangement, private placement bonds of small and medium-sized enterprises have the advantage of being close to the market, enterprises, and investors. They have achieved a better connection between investors with risk tolerance and small and medium-sized enterprises, and are welcomed by small and medium-sized enterprises.
"Private placement bonds of small and medium-sized enterprises may have two major problems, liquidity and credit risk, on the New Third Board." Zhu Lixu explained that the first is the liquidity problem. Private placement bonds can only be traded on the exchange's fixed income platform or comprehensive agreement trading platform, and these trading platforms generally have trading starting point restrictions. Therefore, various problems lead to poor liquidity and not as good as corporate bonds and corporate bonds in terms of liquidity. The second is the issue of credit risk. Since companies listed on the New OTC Market are generally entrepreneurial companies, they are subject to greater operating risks. If the business performance is not good, private debt investment may have greater credit risk problems.
“In order to increase the influence of the issuance of private placement bonds of small and medium-sized enterprises and reduce the financing costs of private placement bonds, the system design of private placement bonds of small and medium-sized enterprises must be thoroughly reformed. For example, by giving private placement bonds the option right to convert into equity, or converting into shares under certain conditions, this can increase the number of private placement bonds of small and medium-sized enterprises. attractiveness and reduce financing costs to a certain extent. In addition, insurance companies should be established to guarantee the risks of private placement bonds of small and medium-sized enterprises, so that investors can obtain a certain degree of compensation for the credit risks of private placement bonds, which will also help expand the private placement bond issuance market." Zhu Lixu suggested.
Anna
Anna