Research On The Motivation And Financial Effect Of Convertible Bonds Issued By Listed Companies

Convertible bond is a kind of bond that investors can convert into common stock at a certain time in accordance with the principle agreed in advance.It is a compound and innovative financing instrument,which has the characteristics of debt and equity at the same time,and has the advantages of reducing financing cost,easing equity dilution and adjusting capital structure.Convertible bonds started early and developed rapidly in foreign countries,which were regarded as a flexible financing tool and welcomed.However,due to the late start and slow development of convertible bonds in China,the number of enterprises issuing convertible bonds is not large,and the relevant researches are relatively few.Nowadays,under the background of the relevant system of refinancing methods of listed enterprises issued by the CSRC,the development of convertible bonds in China has gained new opportunities and developed rapidly in 2017 and 2018.Based on this,it is of great significance to study convertible bonds.Baiyun international airport co.,LTD.,a representative enterprise in China's civil aviation industry,publicly issued 3.5 billion convertible bonds on February 26,2016.By analyzing the motivation and financial effect of issuing convertible bonds in baiyun airport,this paper hopes to help other listed companies better understand the financing of convertible bonds and improve its financing effect.Specifically,the research contents of this paper are as follows: firstly,the introduction introduces the research background and current situation of convertible bonds.Secondly,the relevant theories used in this paper are introduced.The third part is the case overview,mainly introduces the background,program and conditions of issuing convertible bonds at baiyun airport.Fourth,the paper analyzes the financing motivation of choosing convertible bonds for baiyun airport from four different perspectives.Fifth,the financial effect of convertible bond financing is studied from four aspects: financing cost,financial status,market reaction and equity structure.The last part is the conclusion and the enlightenment.Through the study of this paper,it is believed that although baiyun convertible bonds can optimize the capital structure,in terms of financing cost,the short duration does not significantly reduce the cost,and it also worsens the financial condition of enterprises in the short term,as well as the adverse market reaction in the short term.Thus this article concluded that about the choices of Chinese listed companies financing,think the company should choose appropriate financing ways according to the internal and external environment,the clear with convertible bond financing,should be handled carefully,the issue of choosing appropriate timing,etc.,and in the case of the convertible bonds is more and more popular,regulators should strengthen supervision and information disclosure.