A Study On The Conversion Rights Of The Convertible Bonds

The conversion right of the convertible bond is the key factor which can directly influence the success of the convertible bond's issuing and converting. It is not only the soul which distinguishes it from the ordinary corporate debt, but also from the beneficial junction point . Therefore, the study on the conversion right of the convertible bond is of important theoretical and practical value.Academic circles do not have a unified understanding of the legal nature of the conversion right of the convertible bond and the reasonable definition of the legal nature of the conversion right of it is the premise of soluting the dispute of the conversion right of the convertible bond. The realization of the conversion right of the convertible bond needs the active assistance of the issuing company. The bondholders can not conduct the behavior of the issuing company directly. They can only request that the issuing company adopts specific acts to coordinate the realization of the conversion right. So recognizing the conversion right of the convertible bond as the request right fits with the requirement of the practice. Only when the bondholders obtain the right and exercise it in accordance with the legal conditions can the conversion right of the convertible bond have an effect. Once the conversion right of the convertible bondholders achieved, the conversion right would have the following legal effects: the bondholders would change from the creditors to the shareholders of the company, the original bonds would lose the effectiveness, the issuing company's capital would increase, and so on.Around the clue of the conduct that the convertible bondholders converts the convertible bonds to the shares of the issuing company, the text begins from the legal nature of the conversion right of the convertible bond, studies the exercise of the conversion right. It focuses on how to protect the conversion right in the condition that the conversion right is diluted, and so on. The writer gives some legal advice to consummate the conversion right of the convertible bond in our country: firstly, establishing comprehensive compromised authorization capital system; secondly, standarding the exertion of the conversion right when the conversion right is closed; thirdly, reconstructing the provision of monetary correction for transferring shares of stock; fourthly, canceling the provision of compulsory transferring shares of stock.