Discussion On The Causes And Economic Consequences Of AR Company's Convertible Bond Financing

The full name of the Convertible bond is Convertible bond,commonly referred to as convertible bonds,which can simply be understood as bonds as Iou,issued by a listed company.So,Convertible bond,what is it? The Convertible bond can be converted into stock,and the general Convertible bond is similar to a portfolio based on ordinary bonds.In addition to the bonds issued by the company,there is also a guaranteed option,which is time-limited Allows bondholders to convert their holdings into designated shares of the company at a specified conversion rate over a specified period of time.Convertible Bond,a debt financing instrument,appeared later than other equity financing instruments,such as issuing additional shares and distributing shares,although it started late,because of its unique advantages Convertible bond has become one of the main vehicles most companies use to raise money in the capital markets,and has drawn much attention from investors.The most significant feature of the Convertible bond is that it incorporates a right in addition to the inherent features of the company's ordinary bonds,which gives the investor a certain choice in the transfer of equity Investors can well according to their own needs for analysis and judgment,thus deciding whether to implement this power to convert shares,can maximize the protection of their own rights and interests,and precisely because of this,investors have been extremely enthusiastic and focused on Convertible bond.For the issuing company,the Convertible bond can obtain a larger scale of capital inflow at a lower cost of capital,and for investors,the Convertible bond as an investment tool has the advantages of guaranteed bottom income and greater value-added space For former shareholders of the company,the Convertible bond is more effective in protecting their own interests by delaying dilution.According to the data released by China Securities Regulatory Commission,since the issuance of the first convertible bond,China has issued 107 convertible bonds,with a total of 3.549 billion transactions and a total transaction amount of 1465.59 billion yuan.Comparatively speaking,China's capital market starts later than foreign markets,so there are some differences in the maturity and development of the capital market,and convertible bond financing also faces a series of severe challenges.This paper introduces the practical case of Ar Company,starting from the basic theoretical knowledge of convertible bond financing,deeply analyzes the concept of convertible bond,issuing conditions,basic characteristics,issuing motivation and the effect broughtby issuing,combining with the case of Ar Company,in this case,the paper deeply analyzes the main motivation,influencing factors and the economic effect of Ar Company's Convertible bond financing,and reviews the whole process of Ar Company's issuing,so as to pave the way for drawing the corresponding conclusions and enlightenment.The main structure of this paper is as follows: the first part is the introduction,which deeply analyzes the background and significance of the study of convertible bonds And explained the research frame content of this article.The second part is a theoretical overview of Convertible bond financing,which mainly includes four aspects,Convertible bond's issuing conditions and characteristics,Convertible bond's financing motivation,Convertible bond's financing economic consequence evaluation method,the theoretical basis of Convertible bond financing provides support for the follow-up analysis combined with Ar Company's actual case.The third part is a case study of Convertible bond financing.Firstly,the paper introduces the background of Ar Company's choice of convertible bond as financing tool,including the introduction of Ar Company and the analysis of its operation.Secondly,it generalizes the scale,purpose,basic terms of issuance,issuance process,and the situation of late conversion of convertible bonds issued by Ar Company,and then from the macro-environment,industrial environment,market environment,and governance situation,in this paper,the influence factors of the issuing process of convertible bonds by Ar Company are analyzed.The fourth part of this paper analyzes the cause and the influence path of AR convertible bond financing.The fifth part uses the method of event analysis to show clearly the economic consequences of Ar Company's issuing convertible bonds for financing from the financial point of view,and confirms that Ar Company has succeeded in financing through convertible bonds The investors' later choice of stock conversion has no effect on the original shareholders' actual controlling interest.The sixth part is the conclusion and the enlightenment,clear Ar Company convertible bond financing brings the conclusion,as well as provides for the general enterprise may draw lessons from.