Our reporter Zhou Shanghan
Trainee reporter Yu Hong
As a capital intensive industry, securities companies often need sufficient capital as the driving force for the development of the industry. Since this year, under the trend of slow refinancing in the industry, securities companies have made full use of debt financing tools to raise more than 340 billion yuan in total through the issuance of ordinary corporate bonds, subordinated bonds, and short-term financing bonds. Several securities companies have recently been approved to apply for large bond issuance. At the same time, in order to optimize the development concept, the regulatory authorities require securities companies to reasonably determine the financing scale and timing, and strictly regulate the use of funds. In this context, securities companies are more cautious about refinancing.
Bond issuance and financing of securities companies are increasingly hot
Recently, many bond dealers have received applications for wholesale bonds. On the evening of May 10, Shanxi Securities announced that the registration application for the company to publicly issue corporate bonds with a total face value of no more than 6 billion yuan to professional investors was approved by the CSRC. On May 6, the registration application for Caida Securities to publicly issue corporate bonds with a total face value of no more than 4 billion yuan to professional investors was also approved by the CSRC. On April 29, Nanjing Securities said that the CSRC approved the registration application for the company to publicly issue short-term corporate bonds with a face value balance of no more than 7.5 billion yuan to professional investors.
According to the data of Flush iFind, as of May 14 this year, 199 bonds have been issued by brokers, with a total amount of 347.367 billion yuan. In terms of classification, securities companies issued 114 ordinary corporate bonds, with a total amount of 210.57 billion yuan; 25 subordinated bonds were issued, with a total amount of 46.997 billion yuan; 60 short-term financing bonds were issued, with a total amount of 89.8 billion yuan.
From the perspective of the scale of bond issuance and financing by a single securities firm, China Merchants Securities, GF Securities and Guosen Securities rank among the top three since this year, with the total amount of bond issuance exceeding 24 billion yuan. From the perspective of purpose, bonds issued by securities companies are mainly used to repay matured debts, adjust debt structure, supplement operating funds of the company and support business development.
In addition to issuing bonds in the domestic market, the utilization of the international market by securities companies has also improved. Wind information data shows that since this year, as of May 14, four brokers have issued a total of nine bonds overseas (calculated by value date), with a total scale of 1.249 billion US dollars.
Sun Enxiang, wealth partner of Paipai, said to the reporter of Securities Daily: "On the one hand, the reason why securities companies actively finance through multiple channels at home and abroad is that they face certain pressure to repay debts, and" issuing new and returning old "has become a common practice for securities companies to reduce debt pressure; On the other hand, with the increasingly fierce competition in the securities industry, the demand for heavy asset business and innovative business requires securities companies to continuously supplement capital, so as to effectively enhance market competitiveness and risk prevention and control capabilities. "
Industry refinancing behavior becomes more prudent
On May 10, the CSRC revised and issued the Provisions on Strengthening the Supervision of Listed Securities Companies, which mentioned that, "When a securities company makes an initial public offering of securities and goes public for trading and refinancing, it should reasonably determine the scale and timing of financing, strictly regulate the use of funds, focus on the main business, carefully carry out high capital consuming businesses, and improve the efficiency of capital use in combination with shareholder returns and value creation ability, its own business status, and market development strategy.".
Under the influence of the above policies, the refinancing behavior of the securities industry has become more prudent, and the refinancing events of several securities firms automatically expire or terminate voluntarily. On March 18, Zheshang Securities announced that the Proposal on the Company's Plan for Issuing Shares to Specific Objects (Revised Draft), which was considered and passed at the shareholders' meeting on March 17, 2023, would automatically expire upon the expiration of the resolution's validity period, and this matter would not have a significant impact on the company's normal business activities.
On the evening of May 10, Dongfang Wealth announced that, in view of the changes in internal and external environment and other factors, Dongfang Wealth, in combination with the actual development situation, after careful demonstration and research, the board of directors agreed to the company's plan to terminate the overseas issuance of GDR and list on the Swiss Stock Exchange.
"Compared with refinancing methods such as additional issuance and rights issue, securities companies have many advantages in financing by issuing bonds." Sun Enxiang said, first of all, from the level of coupon rate of bond issuance, the cost of bond financing has been reduced; Secondly, debt financing will not dilute shareholders' equity, which helps to retain shareholders' control over the company; At the same time, bond issuance financing has greater flexibility in terms of term, scale and issuance conditions, so that securities companies can select appropriate bond term, interest rate and repayment method according to their own needs; In addition, the bond market volatility is relatively small, so as to avoid the impact of market volatility on financing costs.
