The Research On Performance Of Listed Companies Before And After The Issuance Of Convertible Bonds

Convertible bonds as a hybrid financial instrument has characteristics of both debt and equity, in recent years, it has become one of the major tools for China's listed companies to refinance. This mixing characteristic of convertible bonds adapted to the requirements of investors and financiers, it brings benefits for both sides that the pure stocks and bonds can not achieved. As China's securities market's development, enterprise's emphasis on the choice of financing instruments increased, so the research about the effect of the new financing tool-convertible bonds'application in company is also very important.This article first gives a brief review of the relevant theory about convertible bonds and corporate performance, and find that convertible bonds are closely related to corporate performance. Then, the relationship between convertible bonds and corporate performance is divided into short-term market performance and long-term financial performance, in order to give a more comprehensive analysis.First, calculate the announcement effect of listed companies issue convertible bonds, to study the impact of convertible bonds on the company's share price in distribution aspect. The empirical studies illustrate that the market treat the company's preparing to issue a notice of convertible bonds as a "good news", in the short term, the impact of convertible bonds'issue on corporate performance is positive. The regression analysis showed that the excess rate of return of share price was primarily significantly correlated to debt ratio, net capital gains rate and issue size.Second, study the changes in operating performance before and after the listed companies issuing convertible bonds, to examine whether the issuance of convertible bonds is conducive to the improvement of operating performance of listed companies in the long term. The empirical test results show that the impact of issuing convertible bonds on the company's performance is beneficial in the long run, compared with the control group, the distribution group's overall business performance was better. The regression analysis showed that the change of comprehensive performance was primarily significantly correlated to free cash flow, earnings management and the size of the company.