The Senate now expressly stipulates that the maximum annualized loan interest rate is 25%. The amount exceeding this amount is not judicially recognized. If it exceeds this amount expressly, the lender will even be punished - but that is worse than this.
Much higher.
But Chu, people on Tuesday obviously turned a blind eye to Mayor Liu's rolling eyes. Maybe he didn't see it, maybe it was some kind of contempt:
You may be awesome when it comes to being an official, but when it's your turn to cut leeks... when it comes to finance, you only have a little knowledge.
Chu He was very humble now and had no intention of launching an army to accuse him a few days ago: "Actually, there is nothing special about my plan. I think many people should have better plans..."
"Oh, you should say it first." Liu Xiang was a little dissatisfied, thinking that it's already this time, why are you still pretending?
People around me immediately expressed their opinions: "I have read Elder Chu's plan. It is very insightful! It is very inspiring!"
Chu He said: "I originally planned to elaborate on this plan in the next meeting. Since you two are so interested, I will explain it first."
After that, he tidied up his appearance and looked like he was standing in front of the projection screen preparing for a road show.
After pondering for a moment, Chu He turned around and asked:
"Mr. Zhou, please allow me to ask a question first. Does the Senate prohibit Nanyang Company from issuing bonds?"
He was stunned for a moment, thinking that your plan has something to do with the Senate?! But he didn't read Chu He's plan carefully. He only knew that his plan was based on bonds.
In the document sent to him by the Planning Institute, there was no clear statement on how to raise funds. The issuance of shares was not so much a certain authorization or restriction, but rather the spirit of instructions for the distribution of shares.
He thought for a while and said: "Well... the Senate did not explain this issue clearly. The Senate only gave me the document permitting Nanyang Company to issue 100,000 shares. There are no restrictions on how to issue it and what type it belongs to. The issue of bonds
Not mentioned."
"Then does Nanyang Company plan to issue bonds?"
I thought to myself that it would be useless if I did not plan to do so. The Senate has neither prohibited nor permitted the issuance of bonds. If it is proposed to issue bonds, logically speaking, there would be no problem.
"It is our consistent policy to balance stocks and bonds." The people around him said a correct nonsense. Because most of the financing plans in his hand that are worth looking at are this routine.
Before Nanyang Company had sufficient business reputation, it was obviously more realistic to issue bonds than stocks.
Chu He said: "It is a good idea to issue both stocks and bonds. My personal opinion is that bonds must be issued, and bonds should be the mainstay. To be honest, my original idea was to issue bonds first, and not rush to issue stocks. How could I have thought of that?
The Government Affairs Council directly issued a notice to issue stocks. Bonds are obviously much easier to issue than stocks!"
As soon as they heard the words criticizing the "unprofessional" and "random" behavior of the Government Affairs Council, the surrounding people suddenly became energetic and nodded repeatedly.
But Chu He didn't know the origin of his expression. He thought that what he said was "extremely professional", so he couldn't help but look proud and his voice was a bit louder:
"For the natives, there is no difficulty in understanding the issuance of bonds. It is just borrowing money to earn interest. This is not the case with public offerings. Not to mention whether the big investors can figure out how much the Nanyang Company is worth, we just want to clarify the asset status of the Nanyang Company.
Equity relationships, establishing new equity structures, and assessing asset values are all troublesome."
I was thinking well. A few days ago, I checked the assets and equity status of Southeast Asia Company with Xu Yanliang and Wang Kai. I didn't expect it to be unexpectedly complicated. I haven't figured out the equity structure of Nanyang Company yet.
Chu He continued: "Issuing bonds does not have these troubles, and it is very difficult for a large number of large indigenous households and clan gentry to judge the value of Nanyang Company and make investment decisions in stocks, because it is difficult for them to judge Nanyang.
The value of the company, secondly, it is impossible to judge the income brought by the stock, thirdly, there are concerns about the safety of the principal, and fourthly, the withdrawal mechanism of the principal is unclear. Directed issuance to a small number of people can certainly solve these problems, as long as the Senate is willing to spend great efforts
If you explain it and add some coercion, it’s impossible for the big investors not to buy it. The question is, wouldn’t it be a good idea to have the time and energy to issue bonds?”
Liu Xiang interjected: "The business credit of the Senate is still good. Ziji has issued non-preferred shares, and the subscriptions are quite enthusiastic. There is still a mass base for issuing shares."
"We have a mass base. However, Ziji's several brands clearly have assets in Guangzhou, and they are very asset-heavy. Its operating conditions are also clear at a glance. Rich people can trust it. But Nanyang Company only has one property in Guangzhou.
Signboards, old moneymen don’t know what Nanyang Company actually does,” Chu He said, “I’m afraid it’s impossible to convince the natives just by relying on PPT. We have to come up with something more convincing.”
Liu Xiang frowned slightly and said nothing.
"In addition to being easy to understand, bonds also have clear interest, term, and collateral. It is easy for large indigenous households to judge the value and income of bonds. In addition, there is no possibility of the Senate borrowing money and not repaying it, and the security of the principal and the recovery mechanism are
Everything is guaranteed." Speaking of this, Chu He thought to himself that there was not only a possibility that the Senate would not repay the money, but also a high possibility. When the time came to repay the money, the Senate would probably have many means.
But that didn’t stop him from changing his face as he continued: “So, for large investors, bonds are a more acceptable method, and their willingness to buy will be significantly higher than stocks. Public issuance is less difficult, and multiple issuances are more difficult.
Low, bonds will make it easier to raise more money than stock financing. Moreover, bond issuance is also convenient for forced apportionment. If you provide a "reasonable underwriting" to the chamber of commerce or clan, and ask them to complete the agency sales quota, they can say no.
?"
Zhou Xin said, I understand all this. But now that the Planning Institute has issued a stock financing plan, this stock must be raised. He said: "What you said makes sense, but the Planning Institute's stock financing plan has been issued.
We still have to carry it out.”
Chu He nodded: "I'm not against stock financing. The shortcomings of stock financing I just mentioned are not absolute. I just think that a two-pronged approach of bonds and stocks is more effective and more conducive to the interests of the Senate."
Liu Xiang coughed lightly: "How do you consider the cost of bond financing? According to our survey, the current average financing cost for general merchants in Guangzhou is about 25%. If the market sentiment picks up, this cost may be as high as 40% to 60%.
Of course, we do not allow such high interest rates to exist now. But even if it is 25%, we cannot afford the financing cost."
Chu He thought: This question is on point. When the Senate issued a notice that only mentioned the issuance of stocks, there might be considerations in this regard. It seemed like a difficult problem, but it scratched his itch. At that moment, a look appeared on his face.
With a "confident" evil smile, he said:
"High interest is not a problem. Obviously not paying it will not work, but you can dig holes in the rules. The Senate controls the power to formulate and interpret the financial rules of this time and space, and has money and power. There are many ways to lower the cost of bond financing.
Yes, it depends on how shameless the Senate is."
Everyone around laughed: "What's going on? To celebrate Secretary Ma's birth of a baby boy, the country will cut interest rates?"
"Hahahaha, then I'm afraid I have to work too hard for the financial health of the Song Dynasty." Chu He said with a smile, "It doesn't have to be so ugly. I can give you a few examples. One is the "reasonable underwriting" I just mentioned.
It's the same as a reasonable burden. Let's set the interest rate at... let's say 10%, allocate the issuance quota to major guilds, chambers of commerce, and large clan accounts, and let them allocate it themselves. As long as we are willing to pay back the money, there will be no resistance to collecting the money.
It would be too big.”
This is actually equivalent to buying an investment certificate, let alone 10%, even if there is no interest, they will probably buy it.
"The second is to create self-made rules. For example, it is written in the issuance terms: In the areas where Nanyang Company operates, interest rates can be reduced and exempted according to the law in the following situations: extreme natural disasters such as tsunamis, earthquakes, and typhoons, trade embargoes, wars, and major disasters.
Large-scale infectious diseases, evidence of overlords, etc. Of course, what is considered a business area, what standards are considered tsunamis, earthquakes, etc. The power to interpret these terms is in the hands of the Senate. We cannot do this in the old time and space, and we are not yet here
It’s up to you.”
Everyone around him nodded secretly after hearing this. Chu He still had some ideas. Liu Xiang's face began to look ugly.
"Third, you can find reasons to fine you interest. Yes, you will fine the interest received by the borrower. Our Senate is so tyrannical." Chu He became more and more excited as he spoke. "You, a big family, have not paid all the slave taxes this year. You will be fined!
The interest penalty on Nanyang Bonds this year will be reduced by 50%! You, a clan force, violated the Senate openly and secretly, obstructed official business, and will be fined! The interest penalty on Nanyang Bonds held by the family for three years will be reduced by 100%!"
The people around were also happy: "In this case, we must leave a hole in the rules from the beginning."
"Yes, it can be put into 'other situations recognized by the Senate'."
"What about the collateral..."
"Of course you can make false accounts, inflate income, inflate assets, etc. It's very simple. Merchants in Wuzhou can also go to Batavia to investigate how many logs are in Nanyang Company's warehouse?" Chu Heyue
The more excited he said, the different people he was in the conference room just now, almost frothing at the mouth, "The same goes for the principal, forced debt-to-equity swap [Biquge www.biqugexx.co], forced extension, borrow new and repay old
, if the company goes bankrupt, we have plenty of means, and we don’t even have to pay back the principal.”
The people around me also had backgrounds in finance, and even if they were not familiar with these routines, they were aware of them, but they were not "inexplicably surprised." Liu Xiang became more and more frightened as he listened. He thought that in the past, the Executive Committee had extremely suppressed the financial industry and had long used money as its mouth.
It is not unreasonable for accountants to use these methods. Not to mention the natives in the 17th century, how many well-educated people in the 21st century can understand it! If we really let them let themselves go, the consequences will be disastrous.