Analysis Of Convertible Bond Core Terms

Convertible bond's issuing amount and trading amount both reached a new high inChinese capital market in 2003. Institutional investors and individual investors, evenQFII all gave a particular attention to this new financial product.In 2004, Chinese capital market underwent a recessionary trough. However,convertible bond had a good performance during this period and became a very hotfinancial product even in a cold market.How could convertible bond outperform other financial categories in such a coldmarket situation? Basically, convertible bond have both equity and bondcharacteristics which makes it more secure to resist stock price going down,meanwhile, maintain the upside potential.In this paper, I try to deep into the whole process of core terms designing in "Model& Plastic technique Co., Ltd." convertible bond. At the initial, I will give a detailresearches on her developing history, operating situation, financial position, pastfinancing records and also stock price performance in secondary market. Thereafter,standing from an underwriter, I would like to show the whole process of design theterms of convertible bond. Combined CSRC regulatory concerns with Chineseconvertible market situation, I have a deeply thinking to the pros and cons, especiallysome problems in Chinese convertible market, which also demonstrated in bothqualitative and quantitative methods.Currently, Chinese convertible market is not mature and also has many works to do,for instance, the split of stock ownership problem. This problem makes the benefitdiscrepancy between the non-floating stock owners and floating stock owners, whichleads to the impairment of floating stock owner's benefit.Finally, I will try to give some suggestions to correct those problems in core term.Hopefully, It could be helpful to the developing of Chinese convertible market.