Research On The Effect Of Listed Companies' Issuance Of Convertible Bonds

2017 is the year in which the CSRC adjusted the refinancing policy of listed companies.Since the financing threshold for non-public offering of shares has been much lower than other refinancing methods,it became the main means for refinancing of listed companies.Constrained by the quota and frequency of the new policy,the private placement is no longer a profit weapon for listed companies.The convertible bonds are not subject to the new regulations,and the CSRC also encourages the refinancing method of convertible bonds.The rules for investors to apply for convertible bonds are changed from fund subscription to credit subscription,which makes the issuance of convertible bonds become an important refinancing channel of listed companies,and its number of issuance has risen sharply in 2017 and afterwards.This paper firstly combs the existing research results of the convertible bonds in the academic circles.The research conclusions of the scholars on the motives of convertible bonds are relatively consistent.Because the convertible bonds have both stock and debt characteristics,it reduce the financing cost of enterprises and have a good effect on the adverse selection cost caused by information asymmetry and the problem of relieving the principal-agent.However,in terms of the announcement effect and performance impact of the convertible bonds,different scholars have different conclusions due to the differences in research sample selection.Subsequently,this paper introduces the concept,characteristics,issuance conditions,advantages of the convertible bonds and the conversion premium rate and the pure debt premium rate related to convertible bonds.In the case selection,this paper compares the typical Shuangliang convertible bonds with failed financing and the typical Zheneng convertible bond that has been successfully issued.The article reviews the issuing motives and conversion process of the two convertible bonds,and analyzes the financial impact on the two companies after the issuance of convertible bonds.The difference was finally found out between the two convertible bonds in terms of timing,issuing terms,and coversion price adjustment.When the Shuangliang convertible bond was issued,its stock price was at a high level,and the conversion price was set too high.At the same time,there were many loopholes in the resale clause,which caused a large-scale resale of Shuangliang convertible bond,and they led to the failure of financing.Zheneng convertible bond was issued in the bear market,and the conversion price was set lower.As the market sentiment warmed up,its stock price rose with the broader market,triggering the redemption clause to successfully complete the huge debt-to-stock swap.A win-win situation for convertible bond issuers and convertible bond investors were achieved.This paper also calculates the change of economic value added after the issuance of the convertible bond by Zheneng Electic Power,and analyzes the market reaction of Zheneng convertible bond based on the event research method.The research results show that Zheneng convertible bond effectively improves the financial performance of enterprise and the market responds well for its issuance.The success of the issuance of Zheneng convertible bond provides a good reference for the refinancing of.electric companies.Finally,this paper draws relevant inspiration from the results of the case study,and provides suggestions for the issuance of convertible bonds for other companies in the future,such as the amount of the bond,the issuing time,the conversion price setting and the design of the convertible bond terms.