A Case Study On The Financing Of Bengang Steel Plates Issuing Convertible Bonds

Convertible bonds are financial derivatives on the basis of corporate bonds that enable holders to convert into common stocks of the company at an agreed price within a certain period of time.It has the dual advantages of debt and equity.Compared with the degree of development of the European and American convertible bond markets,the appearance of convertible bonds in China is relatively late,and there is still a lot of room for development in China's convertible bond market.In 2017,the China Securities Regulatory Commission officially issued the "Decision on Amending the Implementation Rules for the Non-public Issuance of Shares by Listed Companies",tightening the fixed increase and encouraging the financing of convertible bonds.The number and scale of issuance of convertible bonds by Chinese enterprises are higher than before.Bengang Steel Plate is a representative state-owned enterprise in the iron and steel industry in Liaoning Province.The process of issuing convertible bonds with a scale of 6.8billion in 2020 provides a case for the issuance of convertible bonds,clause design and pricing research.Bengang Steel Plates' successful issuance of convertible bonds to obtain financing through a reasonable plan has played a role of inspiration and reference for other companies,and has profound research significance.This article adopts a research method that combines literature research and case analysis.Starting from the historical background of the development of convertible bonds,this paper reviews the progress of domestic and foreign convertible bonds research,and sorts out the concepts,characteristics and related theoretical foundations.This article analyzes the case of convertible bonds issued by Bengang Steel Plates.First,through qualitative analysis,it introduces the basic information and operation of Bengang Steel Plates Company,and analyzes the background and competitive landscape of the steel industry where Bengang Steel Plates are located.Secondly,through quantitative analysis,based on the financial statements before the issuance of convertible bonds by Bengang Steel Plates,analyze its assets and liabilities,solvency,operating capacity and profitability,and summarize the reasons for its issuance of convertible bonds.Finally,the discounted cash flow method and the Black-Scholes model are used to calculate the basic bond value and option value respectively,and the redemption clauses and resale clauses are considered respectively to modify the option value to determine the theory of its convertible bonds.Value,calculate the deviation between the price of the convertible bond issuance and the theoretical value,and analyze the reasons behind the deviation.This paper found that Bengang Steel Plates chose to issue convertible bonds for financing after a comprehensive analysis of the company's own situation.At the same time,Bengang Steel Plates rationally designed convertible bond terms,which were issued at a price lower than the theoretical value of the convertible bonds.The purpose of convertible bonds is to attract investors.The research of the thesis has universal applicability to the problem of using convertible bonds to finance traditional cyclical industries such as steel,and provides operational basis and theoretical guidance for companies that choose to issue convertible bonds for financing.