The Analysis On The Motivation And Financial Effect Of Convertible Bond Issuance By Yanjing Beer Co., Ltd.

Convertible bond is a kind of corporate bond which can be converted into equity at a specific time.As an innovative financing tool in the financial market,the innovation of convertible bonds is mainly reflected in the nature of its debt,equity and options.Since the United States designed and issued the world's first convertible bonds in 1843,the convertible bond has become popular among the securities market because of its mixed nature,and thus has become an important financing tool in developed countries.In the course of over 170 years of development,the varieties of convertible bonds are more and more abundant,and have been developed rapidly and widely used in the Western securities market.In China,the listed company China Baoan issued the first convertible bonds in the A-share market,marking the introduction of convertible bonds in China's capital market.Although the convertible bond has been in practice for more than 20 years in our country,compared with the mature development of the western convertible bond market,the convertible bond market of our country is relatively backward and the development time is short.Overall,the convertible bond in China is still somewhat immature,many inappropriate doings still exist during the use of convertible bond for listed companies.Therefore,it is of great academic and practical significance to study the motivations and financial effects of convertible bonds.This paper uses normative research and case analysis method to study.In the part of normative research,this paper reviews and summarizes the relevant literature at home and abroad,and expounds the concept,characteristics and theoretical basis of convertible bonds,as well as the motivation of convertible bond financing.In the part of case analysis,this paper selects the case of convertible bonds issuance by Yanjing Beer as research object and applies the "raise problems-analyze problems-solve problems" clue to the analysis of this case.On the basis of investigating the issuance plan,process and motivations,this paper analyzes the financial effects after convertible bond issuance.Finally,the paper summarizes the conclusions and implications of this case,and provides reference for other listed companies to use convertible bond financing.This paper focuses on the motivation and financial effect of convertible bonds.Based on the characteristics of Yanjing Beer,this paper sums up the main motivations of convertible bonds issuance by Yanjing Beer are including: lower financing costs;optimize the capital structure;alleviate agency problems.Other motivations are including: expand production scale and strengthen the ownership concentration of large shareholders.Therefore,based on the comprehensive consideration of the above factors,Yanjing Beer has chosen convertible bond financing.In the study of financial effects,this paper focuses on the financial performance and market reaction.The results show that the financial performance of Yanjing Beer has declined and the market reaction is not good.This paper is divided into six chapters: Chapter I is introduction,which points out the significance and background of this paper firstly,then the research of the motivations and financial effects of convertible bonds are reviewed and summarized,finally expounds the basic framework of the research ideas and methods of this paper.Chapter II is the theoretical overview of convertible bonds,which not only introduces concepts and features of convertible bonds,but also expounds the motivations of convertible bonds issuance and the theoretical basis of convertible bond financing.Chapter III is the case statement about convertible bonds issuance by Yanjing Beer,which introduces the industry and Yanjing Beer in detail firstly,then expounds Yanjing Beer convertible bond issuance plan deeply from the issuance size,the purpose of the funds raised,the terms of issuance,finally introduces and analyses the operation results after convertible bonds listed.Chapter IV is the motivations of convertible bond issuance by Yanjing Beer.In this chapter,selecting Yanjing Beer as research object,the paper analyzes what are the motivations of convertible bond issuance by Yanjing Beer.Chapter V is financial effects analysis before and after convertible bond issuance by Yanjing Beer.On the one hand,financial performances are analyzed before and after convertible bonds issuance from the point of solvency,profitability,operation ability,development ability;on the other hand,the paper analyzes the market reaction of convertible bonds through the cumulative abnormal return(CAR)of the issuance announcement before and after 20 days as well as long term stock price within 2 years after the issuance.Chapter VI is conclusion and enlightenment of case of convertible bonds issuance by Yanjing Beer.Through the study of this case,the conclusions are made and the case provides inspirations for other listed companies to issue convertible bonds in china.