Can Be Converted To The Protection Of The Interests Of The Bondholders

For the large investors ,convertible corporate bond is a relatively new instrument of investment。Because of its strong points, such as the coexistence of safety and venture, unlimited revenue with a safe bottom, it has great preponderance over other common securities. But after its entrance into China, our convertible bonds market does not boom as we had expected. Compared with the English and American securities markets, we have lagged behind in the insurance of convertible bonds. What is the reason of the result? We must admit that our economic system should be partially responsible for the result. But I think the more important reason is the lack of law system to protect the interests of bondholders. After suffering economic loss for investing securities, many investors hold fear towards the corporate bonds. So, the bonds are not favored in the market. Contrast to the common corporate bonds, the corporate convertible bond provides an assurance of income that possesses much attraction to the issuing firms and investors.Convertible corporate bond is a compound security involved the intersection of several different interests. The laws which govern the convertible bonds are related to different kinds of law sectors, but they are quite incomplete and sometimes contradictory that cannot provide a systematic basis for convertible bonds in China. So, the convertible bonds are prone to become a tool for the issuing firms to cheat the investors of money. Therefore, it destroys the development of convertible bonds in China.It is hard for each holder of convertible debentures to protect his interests by striving with issuing firms. But the bondholders are separate,they almost can't work together to protect their interests. Furthermore, each bond holder has relatively less amount of securities which leads to their lack of enthusiasm for supervising the issuers. They are prone to become a speculator pinning their hope on other's supervision on the issuers. So, it goes against the protection of whole bondholders. Without a effective mechanism of protecting bondholders, the bondholders are vulnerable, and the convertible bonds would run down in China. Therefore, in order to protect the whole interests of bondholders, we must establish a law system which can facilitate the protection the interests of bondholders as a whole. Through the analysis of bondholder communities and trust system,we can find that it is suitable to adopt the advantages of both systems and establish a suitable system to protect the interests of bondholders as a whole.The foreword section introduces the background of the topic, the legislative status quo, and educes the reason of writing this dissertation.The first section mainly introduces the primary rights of bondholders. First, this section demarcates the definition of the convertible bond, then, emphasizes the basic elements, analyses the holistic characteristics of the convertible bond. The author deems that the convertible bonds have the characteristics of share and creditor's rights, convert is its core. Then, I summarize the superiority of the convertible bonder and the primary rights of bondholders.The second section focuses on the necessity of protection for bondholders. First , I analyze the inevitable risks that the bondholders are confronted with. But many corporations usually disregard these risks, neglect the interests of bondholders. So, we...