关键词: 永续债置换, 策略性债务支付, 财务困境, 激励相容, 帕累托改进

Abstract:

In order to avoid bankruptcy and liquidation， debt restructuring is often adopted by enterprises to resolve the debt crisis after falling into financial distress due to liquidity shortage. At present， most of the debt restructuring methods used by Chinese enterprises are debt-equity swap and permanent debt write-down. In this kind of restructuring， debt-equity swap directly leads to equity dilution or even the transfer of controlling equity， and debt write-down results in low debt repayment rate.Based on the existing research results， the interests of enterprises， shareholders and creditors in financial distress are coordinated， and then a combined relief strategy based on perpetual debt replacement and strategic debt service is constructed. Specifically， the research contributions of this paper are summarized as follows.Firstly， the incentive compatibility mechanism of all parties to benefit distribution under financial distress is established. In view of the serious dilution of equity and low debt repayment rate under the debt restructuring plans of Chinese enterprises， perpetual debt replacement is adopted to coordinate the interests of all parties at first. This is expected to reduce short-term liquidity pressure， lock up long-term funds and avoid refinancing risks， thus avoiding bankruptcy and liquidation. Besides， through debt equivalent replacement， it is expected to achieve debt preservation， maintain the existing shareholding ratio and avoid the equity dilution. Meanwhile， the strategic debt service is carried out if coupon of the perpetual debt after replacement cannot be paid in the later stage of the financial distress. The optimal distribution proportion of the enterprise value and the optimal temporary write-down coupon are determined through the Nash game between shareholders and creditors as well.Secondly， a combined relief strategy is established according to the severity of liquidity shortage. Different from formulating debt restructuring plans in a single way or according to the proportion of default debt funds， the financial distress in different stages is alleviated according to the severity of liquidity shortage. In the early stage of financial distress， when the enterprise cannot pay the principal and coupon of the bond due to the shortage of liquidity， the perpetual bond replacement is used to alleviate the financial distress for the first time. With the increasing degree of liquidity shortage， strategic debt service is adopted for the secondary relief of the financial distress that the liquidity after the debt replacement is not enough to pay the perpetual coupon. So， this combined relief strategy is expected to improve the efficiency of financial distress relief and reduce the risk of bankruptcy.Thirdly， the pricing model under the combined relief strategy is established. Based on option pricing method and Nash equilibrium negotiation mechanism， by setting liquidity threshold and asset stock threshold， the value pricing model of enterprise， equity and debt， debt loss estimation model and corresponding applicable conditions are constructed.Fourthly， taking the bankruptcy reorganization enterprises as samples， the applicability of the combined relief strategy is verified， and its role in relieving the financial distress， avoiding equity dilution and improving the debt repayment rate is tested as well.It is found that under appropriate conditions， the financial distress of enterprises can be effectively relieved by the combined relief strategy which is mainly due to two reasons. Firstly， extending the debt maturity through perpetual debt replacement can greatly alleviate the pressure of short-term principal and interest repayment， lock in long-term funds and avoid refinancing risks. Secondly， a loss absorption mechanism for the replaced perpetual bonds is added by the strategic debt service， which further alleviates the liquidity shortage after the perpetual bond replacement. Meanwhile， compared with bankruptcy liquidation and bankruptcy reorganization strategy based on debt to equity swap and permanent write down， the combined relief strategy can increase the enterprise value， equity value and debt value， and realize the Pareto improvement of the overall effect. Besides， under the combined relief strategy， higher asset value volatility has a negative impact on enterprise pricing and leads to credit risk increase， while the game ability of creditors can play a role in optimizing enterprise value and reducing credit risk.

Key words: perpetual bond replacement, strategic debt service, financial distress, incentive compatibility, Pareto improvement