Abstract
In view of contingent convertible bonds, this paper studies the effect of market on the prevention of the debt risk of the local government-backed investment companies. The results are presented as follows: contingent convertible bonds can timely optimize the capital structure of the local government-backed investment companies in the debt crisis, increase the tolerance for the leverage; the mandatory conversion of debt to stock can prevent the debt risk contagion, relief the pressure on the bailouts from the government; risk pricing and exchange in markets can enhance the capabilities of the markets to absorb the loss from the debt risk of the local government-backed investment companies. In a word, market can prevent the debt risk of the local government-backed investment companies by the application of the contingent convertible bonds.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: DEStech Transactions on Economics, Business and Management
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
