The Research Of Exchangable Bond’s Term Set

Since the issuing of the first Exchangeable Bond in 2013,Exchangeable Bonds market has developed rapidly.As innovative financial derivatives,Exchangeable Bonds are favored by more and more enterprises,for these enterprises to achieve low-cost financing,reduction,equity adjustment,market value management and other different functions.Terms set is essential for the successful issuance of Exchangeable bonds.The issuer will set different terms according to the different issuing motives.Investors can set different judgments to determine the issuer’s debts to adjust their own investment strategy.What are the characteristics of the terms of the existing Exchangeable Bonds,whether the provisions of the terms and conditions to determine their debts,the provisions of the exchange of bonds for stakeholders,the credit risk of the bond,the answer to these questions,The provisions of the exchangeable bonds,investors choose a reasonable exchange of bonds is of great significance.This paper uses literature research,descriptive statistics and case study methods to study.On the theoretical front,by reviewing the domestic and foreign literature,we give the research on the motivations,terms set,and investment risks of Exchangeable Bonds,which provide important information for the later analysis.Secondly,the market situation of the Exchangeable Bond terms is studied,and the descriptive statistics are used to analyze the terms of the exchangeable bonds issued on the market from 2013 to 2016,present delisted Exchangeable Bonds’ characteristics of the terms,in order to explore the characteristics of the terms set and the relationship between the terms set and the issuing motivations.This part of the study will lay a realistic foundation for the following case studies.Finally,in the case section,through the analysis of the issuance of Exchangeable Bonds by Tunghsu Group,we analyze the motivations for issuing debts,how the specific terms are set to serve the issuance of debts,and the terms and conditions of the issuer’s controlling interest,the financing cost,the investment income of the bondholders and impact of the investment risks of the bond.Through the detailed analysis of the case,the corresponding conclusion is put forward for the terms of the Exchangeable Bonds,then the paper puts forward some useful suggestions from the bond issuer,the potential investors and the supervisors.The main conclusions are as follows: The terms of Exchangeable Bonds are set to play an important role in the realization of the reduction of large shareholders.The descriptive statistics of the characteristics of the provision of the articles show that the exchange of bonds is becoming more and more significant.In the issuer and investors terms setting game,the issuer in the terms set to take advantage of the initiative.The corresponding policy recommendations are as follows: For regulators,the terms of the exchange bond can be set to increase the number of restrictions,such as the special repair clause provides that when the pledge of the stock is insufficient,the issuer must choose additional pledge shares;for the issuer,it is important for investors to focus on the provision of the repurchase terms,the repurchase price,the conditions for the sale,and the determination of the profitability of the Exchangeable Bonds.Under the terms of the next set of concerns about whether the issuer will add stock pledge,reduce investment risk.