How do enterprises issue bonds?

Bonds are a way for enterprises to raise funds. It is a debt instrument issued by an enterprise or government to meet the capital demand in a certain period of time. Issuing corporate bonds can help enterprises raise funds, reduce financing costs and help enterprises realize financing diversification. So, how do companies issue bonds? This paper will analyze the issue of bonds by enterprises from multiple angles.

First, the problems that enterprises should pay attention to

Enterprises should pay attention to the following issues before issuing bonds:

1. Evaluate the financing needs and costs of the company. Enterprises should determine the amount and method of financing according to their own needs and market conditions, and calculate the cost of issuing bonds according to the cost of capital;

2. Determine the distribution target. Enterprises should consider the issuer of bonds, the risk-taking ability of investors and the requirements for the company's credit rating.

3. Make a bond issuance plan. Enterprises should formulate bond issuance plans according to their own needs and market conditions, including interest rate, term, circulation and issuance time.

Second, the mode of distribution.

Enterprises issue bonds in the following ways:

1. Public offering. Enterprises issuing bonds to the public need to meet the provisions of securities laws and regulations, including the approved prospectus and registration certificate. , with the characteristics of broad market and large financing amount;

2. Private placement. Enterprises can issue bonds to specific qualified investors more flexibly without public offering, but the financing amount is limited;

Three. Bond rating and interest rate determination

When issuing bonds, enterprises need to carry out bond rating and evaluate the credit risk level of enterprises. The rating results will affect the financing cost of enterprises and the risk tolerance of investors. In addition, enterprises need to determine the interest rate of bonds. Generally speaking, interest rate will be influenced by market interest rate, bond grade and company credit history.

Four. Post-issue management

After issuing bonds, enterprises need to manage and maintain, including paying interest, repaying principal on schedule, and abiding by securities laws and regulations. Enterprises should set up a special financial department to be responsible for the management and maintenance of bonds, and ensure the orderly issuance and repayment of bonds.

To sum up, issuing corporate bonds requires enterprises to pay attention to a number of issues, including evaluating financing needs, determining issuance methods, determining bond ratings and interest rates, and managing and maintaining after issuance. Enterprises can reduce the financing cost and realize the diversification of financing methods through reasonable bond issuance and management methods, so as to better play the financing role of bonds.