Research On The Motivation And Effect Of Convertible Bond Financing Of Commercial Banks

This paper selects the 30-billion-yuan convertible bonds issued by Everbright Bank in 2017 as a case study to study the related problems of convertible bond financing of commercial banks.Under the background of stricter supervision and increasingly fierce industry competition,through the application of basic theories related to convertible bond financing;Starting from the background and current situation of commercial bank refinancing,this paper makes a detailed analysis on the motivation and effect of Everbright bank issuing convertible bond financing by using the methods of statistical analysis and event research,so as to promote the healthy development of China’s commercial bank convertible bond financing market.Firstly,from the external environment and internal demand of Everbright Bank,this paper analyzes the specific motivation of Everbright Bank’s convertible bond financing.Driven by the increasingly strict external supervision of bank capital and the increased demand for internal business expansion,Everbright Bank decided to meet the needs of business expansion and supplement core tier 1 capital by issuing convertible bond financing.Secondly,it analyzes the effect of issuing convertible bonds financing by analyzing the operating performance of Everbright Bank before and after issuing convertible bonds financing,the composition and changes of capital structure,the conversion of convertible bonds and the performance of stock price in the secondary market.Finally,it summarizes the experience and problems of Everbright Bank in the process of issuing convertible bond financing,to provide relevant enlightenment and suggestions for commercial banks to issue convertible bond financing in the future.Through the research on the Financing Motivation and effect of Everbright Bank’s issuance of convertible bonds,it is found that the issuance of convertible bonds has supplemented the capital of Everbright Bank and improved its anti-risk ability;At the same time,it optimizes the capital structure and improves the profitability to a certain extent;However,due to the decline of share price and the increase of competitive pressure in the same industry,the conversion rate of convertible bonds is affected,which makes the short-term market effect more obvious,but the long-term impact is insufficient.Therefore,commercial banks should give full play to the refinancing advantages of convertible bonds and optimize the issuance terms;Improve the conversion rate of convertible bonds;Reduce business risks;To improve the ability of sustainable operation.