Research On The Causes And Consequences Of Convertible Bonds Issued By Sany Heavy Industry

Many listed companies in China have financing problems,convertible bonds have the characteristics of both bonds and stocks,it makes up for the shortage of traditional financing tools and meets the financing needs of enterprises,especially after the CSRC updated new refinancing rules in February 2017,convertible bonds that are not restricted by the interval between the date of fund raising and the resolution of the issuing board of directors,strike a balance between financing cost and debt repayment pressure,as a result,the issuance quantity and scale of convertible bonds increase,convertible bond,a hybrid financial instrument,has been greatly developed in the capital market.Given this background,this paper selects Sany Heavy Industry as the case object,mainly studies the motivation of the 4.5 billion yuan convertible bonds issued by Sany Heavy Industry in January 2016 and the impact on the enterprise after the issuance.This paper first to review the basic situation of Sany Heavy Industry and the whole process of issuing Sany convertible bond.Secondly,this paper analyzes the motivation of Sany Heavy Industry to issue convertible bonds for financing from two aspects of external market competitive environment and internal financing needs of enterprises internal.Then use the event study method to estimate the excess rate of return and cumulative excess rate of return in the event period,and to explore the reaction degree of Sany Heavy Industry to issue Sany convertible bond.Then through some important financial indicators to compare before and after the issuance of convertible bond of debt structure ?assets operating efficiency? solvency and cash flow four aspects,at the same time,compared with the industry average,in order to analyze the financial impact of the issuance of Sany convertible bond.Finally,combined with the convertible bond multiple equity conversion,to analyze the changes of Sany's capital stock ? earnings per share ? equity structure and controlling shareholders.Through the in-depth analysis of the case,this paper draws the research conclusion.Sany in order to adapt to the transformation of domestic market economy,issued convertible bonds to obtain the capital needed for enterprise investment projects,increased the enterprise in the market share,improved enterprise in the market competition force at the core of development.The issuance of Sany convertible bond had received positive market reaction and positive comments from investors,and enhanced the level of the assets of the enterprise operation and optimized the enterprise's solvency,increased the company's total share capital,optimized the shareholding structure.This paper aims to provide experience for the same type of listed companies to issue convertible bonds,suggests the company of issuing convertible bonds should reasonably set the issuance terms? issuance timing and conversion price suggestions,meanwhile,it hopes that the regulatory authorities can further improve the information disclosure system of convertible bonds,so as to promote the better development of China's convertible bond market.