Study On Financing Risk And Control Of Convertible Bond

According to Wind data,a total of 192 convertible bonds were issued in 2020,an increase of 27% year on year,and eight of the delisted convertible bonds accounted for less than 1% of the convertible shares.With the continuous expansion and maturity of the convertible bond market,it can be predicted that there will be more and more cases of "non-convertible" convertible bonds in the future.Through literature review,it can be found that domestic scholars have little research on the financing risk and control of convertible bonds.Therefore,the research on the financing risk and control of convertible bonds has great practical and theoretical significance,and it is worth discussing how to make good use of convertible bonds as a flexible tool to successfully finance the listed companies.Based on the research results and theories of domestic and foreign scholars on the risk and control of convertible bond financing,this paper defines the risk of convertible bond financing from the perspective of risk loss,and uses the literature research method to sort out the current scholars’ research on the risk of convertible bond financing,so as to provide a theoretical basis for identifying the risk of convertible bond financing.In this paper,the latest failed case of convertion-to-equity conversion by the end of 2019--Ge Li Convertion-bond was selected as the case study object.From the general situation of Ge Li Real Estate,the review of major events in the issuing process of Ge Li Convertion-bond,and the impact of the failure of Ge Li Convertion-equity conversion on Ge Li Real Estate,the financing cases of Ge Li Convertion-bond financing were comprehensively summarized.Then,this paper identifies and evaluates the risks of Ge Li’s convertible bond financing,mainly including the risks at the business level,the financial level,the risks at the decision-making level of convertible bond financing and the risks at the stock price fluctuation level of the company in the capital market.AHP is used to get the risk weights and fuzzy evaluation method is used to evaluate the risks of Ge Li’s convertible bond financing.The results show that the business risk,financial risk and decision-making risk of Ge Li’s convertible bond financing are the key risk points,and the risk of stock price fluctuation of companies in the capital market is less.Then,specific and operable risk control measures are proposed for the four identified risk points as follows.By breaking the geographical restrictions of real estate business and focusing on the coordinated development of business transformation,risks at the business level are controlled.By improving the sales ability and asset turnover speed and building the financing risk early warning system to control the financial risk.The risk of convertible bond financing decision can be controlled by selecting appropriate issuing time,designing the terms in line with the company’s own terms and considering the influence of other financing methods on the effectiveness of the terms of convertible bonds.Combined with the conclusion of the event study method,the fluctuation of the company’s stock price can be controlled through value management in the short term,so as to make the company’s stock price meet the demand in the process of convertible bond financing,and realize the risk control of the short-term stock price trend of the company in the capital market.Finally,the research conclusions are summarized to provide reference for future listed companies who want to use convertible bonds for financing.