Case Study On Failure Of Convertible Bonds Into Equity

At the beginning of 2017,with the introduction of new financing rules for listed companies,and a limited number of refinancing tools such as private placement,convertible bonds are once again subject to public debate.Convertible bond,as a new type of financing,has the property of creditor’s rights,equity and options,and plays the role of unique in the diversified financing structure of listed companies in China.The issuers of convertible bonds in China and investors have a great expectation of convertible bonds,and most of the convertible bonds have been transferred smoothly.For failing to turn to the success of the convertible bond,some halfway back to sell,some mature redemptive,whether it’s halfway back to the sale or redemption due to do not conform to the enterprise and investor expectations of the convertible bonds well convertible.Based on the case study of the failure of convertible bonds is sued by listed companies in the steel industry,this paper probes into the factors that affect the convertible bonds,and puts forward corresponding inspirations.This paper explores the factors that influence the smooth transfer of convertible bonds from three aspects: the macro environment,the situation of the enterprise and the issuance of convertible bonds.The study finds that in the macro environment,the adverse impact of macro policies and the weakening of economic situation will affect the smooth transfer of convertible bonds of enterprises;In their own ways,the stability and profitability of the business and its shareholding structure has a large influence on the convertible bonds convertible,the influence of enterprise’s solvency convertible bonds due cannot smoothly transfer brings to the enterprise’s financial risk;In terms of the issue of convertible bonds,the timing and terms of issuance have a great impact on convertible bonds.The study concludes that three factors should be taken into consideration for the successful transfer of convertible bonds issued by enterprises.At the macro level,enterprises should choose to issue convertible bonds when the macro policies and economic trends are favorable.Enterprise own level,convertible bonds should maintain the stability of their business and profitability,structure reasonable ownership structure and reasonable company internal control management,also should keep until cannot turn strands of solvency;On the issue of convertible bonds,enterprises should pay attention to the timing of convertible bond issuance.The best time should be for the stock price to be changed from low to high,and the design of the clauses should be more reasonable.It is hoped that the above three Revelations will help enterprises that issue convertible bonds.