The Impact Of Issuing Exchangeable Bonds On The Performance Of Issuers And Underlying Stock Companies

The domestic exchangeable bond market has developed for ten years,and the number and scale of issuance have increased significantly.However,compared with the volume of exchangeable bonds in foreign mature market systems,it still has sufficient room for development.Exchangeable bonds can help the issuer achieve the objectives of moderate reduction,low-cost financing and capital operation arbitrage,and thus have greater research value.14 Baogang EB,as the first publicly-recognized exchangeable bond in China,has representative and reference value.Therefore,this article uses this as a case study to study the impact of exchangeable bond issuance on company performance in order to enrich the research on domestic exchangeable bonds and provide some help for the development of the exchangeable bond market.Firstly,on the theoretical level,this paper analyzes the impact of issuing exchangeable bonds on the performance of issuers and underlying stock companies from the perspectives of financing options,market information interpretation and capital structure changes.And then combines the data of 14 Baogang EB and domestic exchangeable bonds to conduct a detailed analysis of the case: On the one hand,combined with the distribution motive of Baowu Group,the development background of the steel industry and the related financial data changes of Baowu Group after the issuance of exchangeable bonds,the impact of the release of 14 Baogang EB on the performance of Baowu Group was analyzed.On the other hand,using the event study to analyze the impact of issuing exchangeable bonds on the performance of the underlying stock companies from the industry level,and then combining the conclusions,specifically explore the impact of the release of 14 Baogang EB on the performance of Xinhua Insurance Company.The conclusions of this paper are as follows:(1)For the issuer,after the issuance of 14 Baogang EB,the demand for liquidity of Baowu Group was satisfied,the capital structure was optimized,and the changes in financial data showed that all aspects of business capabilities maintained industry leading status,and the company's performance was(2)For the underlying stock company,the industry-level analysis shows that the issuance of exchangeable bonds will not have a greater impact on the market performance of the underlying stock companies.The case level is consistent with the industry-level conclusions.The release of 14 Baogang EB caused a slight decline in Xinhua Insurance's share price,but the impact is small.In general,the issuance of exchangeable bonds can meet the needs of the issuer's capital,improve its operating conditions,and improve company performance without adversely affecting the performance of the underlying stock company.Based on the above research,this paper summarizes the main functions of exchangeable bonds and make recommendations from three perspectives: the issuer can actively consider the use of exchangeable bonds and pay attention to the selection of reasonable timing.the regulator should Encourage the issuance of exchangeable bonds and transfer the supervision to the pre-regulatory transfer to the event and after-the-fact supervision.When investing,investors should pay attention to the value of both exchangeable bonds and debt,strengthen risk awareness,and rational investment.