A Case Study On The Issuance Motivation Of Blue Cursor Convertible Bonds And Its Impact On The Downward Revision Announcement Of Convertible Share Price

As a new type of financial instrument,convertible corporate bonds(hereinafter referred to as convertible bonds)have its particularity.Its equity financing characteristics not only provide a new choice for the financing of listed companies,but also widely favored by investors.Due to the late start of China’s convertible bond market,immature market development,and high requirements for the professional qualifications and capabilities of bond issuers,the early development of the bond market was not smooth.In order to break this impasse,the two new regulations issued by the government five years ago led to a blowout issuance in the convertible bond market,and the terms of convertible bonds have been continuously practiced and improved in the issuance.One of them is the special downward revision conversion price clause unique to China’s bond market.This clause can enable the issuer to take the initiative in influencing the company’s share price and the holders’ conversion behavior.However,the domestic research on this clause has not been systematic in recent years.Therefore,this paper adopts the research method of case and empirical analysis,taking Beijing bluecursor Co.,Ltd.(referred to as bluecursor for short)as an example,analyzes the motivation of issuing convertible bonds for financing,and then carries out specific analysis and Research on the impact of the announcement of the special downward revision of the conversion price terms on the company’s stock price and financial performance.There are six modules in this paper.The first module takes the development history of China’s convertible bonds as the research background of this paper,and then expounds the significance of this paper.At the same time,it expounds the existing domestic and foreign research theories on the issue motivation,the design of revised terms,and the impact of convertible bond announcements on the stock price and corporate performance,lists the framework for studying the convertible bond issue in this paper,and then introduces the specific research methods of this issue,Finally,it introduces the possible innovations and shortcomings.The second module is the basic theory of convertible bonds.The third module mainly introduces the content and implementation process of blue cursor convertible bond terms,and analyzes the motivation of the company to adopt convertible bond financing.The fourth module is the research on the impact of the revision announcement on the company’s short-term financial performance.The fifth module is empirical analysis,using the event study method to analyze whether the market has a significant response to the release of the three amendments,and analyze the differences.The sixth module is the conclusion and Enlightenment of this paper.This paper concludes that the market response to the downward revision announcement is not obvious,which is conducive to the continuous operation of the company and the improvement of its solvency in the long run.Then,from the perspective of how to design and use the amendment clauses,this paper puts forward suggestions on how to reasonably design the clauses to appropriately affect the company’s share price,and how to supervise such financial instruments under the new policy background,divided into two subjects-the issuer and the regulatory authority.