The Performance Of Firms Issuing Convertible Debt And Its Effect On The Behavior Of Converting Debt

Convertible debt has been playing a more and more important role in China since 2000. In 2003, convertible debt financing quantity first exceeded the other SEO quantity, and because the experienced studies prove that the listed companies after SEO can not bring back the better performance, then the performance after convertible debt offering is a problem worth paying attention to.In the Empirical analysis, we first investigate the operating performance both prior to and following the issuance of convertible debt. The result indicates that the operating performance declines slightly in the two years after issuance. Compared with the industry and size matching firms, convertible debt issuers perform better both prior to and following the issuance, this is closely related to the issue policy of Chinese stock market. And compared with the equity issuers, there is no significant difference, but the increasing indexes are better than the matched, we also provide some explanations for the result. And then we investigate the long-run performance both prior to and following the issuance of convertible debt. The result indicates that there is no significant difference both prior to and following the issuance. Compared with the industry and size matching firms, convertible debt issuers group has positive CAR while the matching group is negative, and compared with the rights issuers, there is no significant difference prior to issuing, but significant in about 5% level, the CAR of the convertible debt issuers group is larger than the matched.In the Chapter Five,we also investigate the behavior of converting of the convertible debt in Chinese security market, results reveal that the behavior of converting differs a lot in different months both to the individual convertible debt and the same convertible debt. To the individual convertible debt, there is no significant relation between the converting proportion and the abnormal return of the corresponding stock, but to the totals, there is significant relation. And we use TESTDROP test to prove that including the return data of the convertible exchange market is not beneficial to optimizing the model about the influencing factors of the behavior of converting.