An Comparative Analysis Of The Announcement Effects About Exchangeable Bonds And Convertible Bonds

Along with the continuous growth of Chinese economy,the number and scale of companies are constantly expanding.Correspondingly,financing needs have also been continuously improved.However,corporate financing channels have not been well expanded,relying mainly on bank loans and equity financing.While,exchange bonds and convertible bonds those are mature in overseas markets have not been fully released in China.For solving the “non-tradable share” issue,the CSRC put forward exchangeable bonds in October 2008 which first appeared in 2013 and then achieved rapid development in the past two years.Further,the new regulations on refinancing launched in February 2017.The issuance and speedup of convertible bonds will be verified,and the depth and breadth of the markets for convertible bonds and exchangeable bonds will be raised unprecedentedly.Since both bonds are Rights Bonds,the impact of their issuance on the stock price has become the focus of the markets.This article focused on examining whether the issuance of two kinds of bonds have impacts on the stock price,then check the direction and degree of the impacts,which means announcement effects.Then systematically compares and analyzes the announcement effects and the influencing factors of the two bonds.Firstly,introducing the research objects: exchangeable bonds and convertible bonds,and describing the development status of exchangeable bonds and convertible bonds through data description and analysis.Secondly,112 convertible bonds and 57 convertible bonds which issued during 2014 to 2017 were used as research samples,and the abnormal return of stocks was used as a measure of the release announcement effect of exchangeable bonds and convertible bonds,then using the event study method to empirically test the announcement effects and the relationship between the two bonds.Then,selected 8 factors which may affect the announcement effects,and established a multiple regression model for further analyze.After theoretical and empirical analysis,main findings are as follows:(1)Both the exchangeable bonds and the convertible bonds have negative announcement effects,among which the negative announcement effects of the convertible bonds announcement are significant,while the negative announcement effects of the exchangeable bonds are not.(2)Compared with the exchangeable bonds,the convertible bonds have a greater negative announcement effects,but the factors are different.(3)The announcement of exchangeable bonds and convertible bonds both have a "time-selective" phenomenon in terms of timing.Based on the above research conclusions,this paper proposed separate proposals for issuers,investors,and regulators of exchangeable bonds and convertible bonds.