Research On The Causes And Effect Of Convertible Bond

With the development and maturity of our country’s capital market,the options for financing of listed companies have become increasingly open and enriched.Among them,convertible bond merges the characteristics of stocks and bonds.It is a kind of bond with a low interest rate contrast with the bank interest rate,also an option with the right to guarantee conversion that allows bonds to be held.People can convert the bonds into stocks within a specified time.It is precisely because of its unique financing characteristics and the continuous supporting policies of the CSRC since2017 that convertible bonds have been favored by the capital market,the scale of convertible bonds has expanded,and more and more investors also gradually get involved.However,compared with Western countries,the development history of convertible bonds in our country is relatively short.The experience is insufficient.So it has not yet become the main financing method.The research on convertible bonds provides guidance for Chinese companies in the practice of issuing convertible bonds,and giving scholars in related fields theoretical references.This article starts from the theory of convertible bonds,giving a comprehensive introduction to its related theories and literature.And explaining its concepts,basic features,issuance terms and issuance process.By introducing the case of Haier’s convertible bonds.It analyzes Haier smart home’s motives for issuing convertible bonds from the external and internal factors,and analyzes the equity conversation of Haier convertible bonds and the equity caused by it.Then summarizing the existing problems of Haier’s convertible bonds.Finally,drawing the conclusion of this paper,combining with the case to give general enterprises some advice and inspiration.Through the analysis of the case,Haier smart home issued convertible bond financing in order to adapt to the status quo of the macro economy and the development trend of the white goods industry to raise funds for project construction and expansion,and also to optimize its own capital structure,stabilize its own equity structure and strengthen the level of competiton with other enterprise and market share.The market showed a positive attitude to the declaring date of Haier convertible bonds,and the share price of Haier smart home showed an overall upward trend during the existence of Haier’s convertible bonds.The issuance of convertible bonds has strengthened Haier’s solvency and profitability,and the overall financial indicators have performed well.Convertible bonds adjusted and optimized the debt structure.Although the successful completion of debt-to-equity swap resulted in an increase in equity capital,it still maintained the absolute control of the major shareholder,and the earnings per share capacity increased rather than decreased.However,after analysis,Haier’s major shareholders had a large number of selling and reducing holdings in the initial stage of the convertible bond listing transaction.This article recommends that when companies issue convertible bonds,consider the stock price and the future development trend of the company to reasonably choose the timing of issuance and set reasonable issuance terms.At the same time,it encourages investors to invest in convertible bonds cautiously,and give the regulatory authorities the suggestions of disclosure,review,delisting system.