Case Study On The Financing Effect Of Exchangeable Bond Of Baosteel Group

Compared with developed countries,China's securities market started late,and the development of the stock market and bond market is unbalanced and poor.In particular,the bond market has problems such as small market size and limited bond varieties,which restrict the development of China's financing market and bring difficulties to the financing of Chinese enterprises.In addition,the development of China's financing market is unbalanced.The financing of enterprises is mainly indirect financing with limited direct financing and high financing cost,which limits the financing capacity of enterprises and is not conducive to the growth of enterprises and the healthy development of China's economy.Therefore,it is of far-reaching significance to promote the development of China's bond market to improve enterprises financing ability and improve the capital market.To enrich bond varieties is an effective way to promote the development of China's bond market.As an innovative hybrid bond,exchangeable bonds not only have the characteristics of ordinary bonds,but also have embedded stock call options,which have the advantages of low financing cost,good flexibility and revitalization of existing assets.In addition,in order to promote the application and development of exchangeable bonds in China,the government authorities have constantly improved relevant laws and regulations.Therefore,it is necessary to explore the role of exchangeable bonds.This article attempts to our country's first public offering may exchange the bond financing of Baosteel group as the research object,analyses its why issue exchangeable bonds,and emphatically analyzes the financing effect,exchangeable bonds in hopes to illustrate the characteristics and2 advantages of exchangeable bonds,and it provides practical experience for other enterprise application and guidance,make it become the important tool of corporate finance.Firstly,this paper expounds the connotation of exchangeable bonds,summarizes the characteristics of exchangeable bonds and the advantages and disadvantages of issuing exchangeable bonds,and takes agency theory,priority financing theory and control right theory as the theoretical basis for enterprises to use the financing of exchangeable bonds.Secondly,this paper reviews the financing of convertible bonds issued by Baosteel group,including the general situation of Baosteel group,the background of issuing convertible bonds by Baosteel group,the basic situation and important terms of issuing convertible bonds,and analyzes the characteristics of financing of convertible bonds issued by Baosteel group.Then,this paper analyzes why Baosteel group issued convertible bonds,and focuses on the application of convertible bond financing impact.Through comparative analysis,financial index method and event study method,it is found that the convertible bond financing issued by Baosteel group supplements the working capital of the group,alleviates the liquidity strain of the group,improves the debt maturity structure of the group,and has a positive impact on the group's solvency and corporate governance.In addition,it also has a positive effect on the performance of the company's capital market,but this effect is not sustainable.Finally,by analyzing the application of convertible bond financing in Baosteel group,the research conclusion is drawn and relevant Suggestions are put forward for the successful issuance of convertible bond.This paper hopes to analyze the advantages and effects of convertible bond financing through the study on the convertible bond financing issued by Baosteel group,promote the application and development of convertible bond in China,and promote the development of China's bond market and financing market.Inaddition,it can also enrich the research on the specific application of exchangeable bonds in China to a certain extent.