The Motivation Of Convertible Debt Issuing Within Chinese Listed Companies And The Empirical Study Of Its Impact Factor

As a financial tool, convertible bond has the character of the stock as well as that of the bond. Bondholders have the right to convert convertible bond into stock of the company within a predetermined period of time. If the bondholder has not executed his right, the company is responsible to pay him the interest and principal before the expiring date of the bond. Since its invention 160 years age, the newly developed convertible bond has experienced ceaseless innovation and become a mature investment and financing tool in the global capital market. The market of convertible bond in China has a relatively short history of development. However, the issue of"Regulations of Offering Convertible Bond"in 2002 marked the prosperity of the market of convertible bond in our country, with the size expanding continuously. Recently, convertible bond, together with SEO (seasoned equity offerings) and rationing shares, has been considered to be the"Three Carriages"of listed companies'main means of refinancing in China. Then this paper's intention is trying to find the motivation of issuing convertible debt within China's listed Companies with the theoretical and empirical method, and give some suggestions on the regulation of listed company's issuing of convertible bond in equity financing.In this paper we conducted a comparative analysis of listed company's implement qualifications in refinance. Followed is the investigation of the issuing of convertible bond provisions and the implementation of the adjustment of conversion price. From the research data we found that listed companies in China have a strong equity finance motive in issuing convertible bond. Accounting of the ratio of convertion had also supported our proposition. In China's capital market, a big property of convertible bond has been designed to be equity-like with a high ratio of convertion. The equity-financing preference of the listed companies induces irrational finance in China's capital market. Investors are motivated to voting by foot on SEO and rationing shares, whereas the government accordingly increases the qualification of issuing. In certain circumstance when SEO and rationing shares fail to meet the requirement of listed company's financing, convertible bond may be regarded available as the third financing method.In our case study we used the listed companies which are qualified for issuing convertible bond from 2002 to 2004 as the sample. In a logistic regressive model, the motivation of issuing was the dependent variable, while listed company's capital...