Abstract
The paper chooses the listing Corporations which refinanced from June 1, 2006 to December 31, 2014 as samples to test and compare the announcement effect of five refinance modes, which are public issuance, non-public issuance, allotment and issuance of corporate bonds, and convertible bonds. Study has showed that the announcement effect of non-public issuance is positive and allotment is negative in large confidence degree, while public issuance and convertible bonds issuance show negative in a lower confidence degree, and issuance of corporate bonds isn’t significant. Therefore, China’s capital market favors non-public issuance most and regard convertible bonds as substitute, think allotment bearish widely, while see light issuance of corporate bonds. So, we must develop incentive effect of convertible bonds, Strengthen corporate debt’s constraint mechanism, regulate the behavior of the big shareholders in allotment. It is found refinancing information leakage phenomenon in empirical research which should cause the attention of regulators.
Highlights
After the listed company announces the refinancing method and its specific financing opportunities, issue targets, prices, etc., market investors, especially the original and potential equity investors, will judge and evaluate the use of the funds for the financing, project investment, company value and future development
Study has showed that the announcement effect of non-public issuance is positive and allotment is negative in large confidence degree, while public issuance and convertible bonds issuance show negative in a lower confidence degree, and issuance of corporate bonds isn’t significant
From the process and results of the above empirical research, the non-public issuance has been widely recognized by the market, and its Abnormal Return (AAR) is positive in the high confidence interval
Summary
After the listed company announces the refinancing method and its specific financing opportunities, issue targets, prices, etc., market investors, especially the original and potential equity investors, will judge and evaluate the use of the funds for the financing, project investment, company value and future development. The Measures for the Administration of Securities Issuance of Listed Companies (CSRC Order No 30, hereinafter referred to as the “Measures”) were performed in May 2006 The refinancing methods such as private placement and convertible bonds have been confirmed and regulated by the Measures. This paper selects five kinds of direct financing methods such as the public issuance of stocks, the non-public issuance of stocks, the allotment of shares, the issuance of convertible bonds, and corporate bonds after the completion of the share reform in China and the implementation of the Measures, and studies the signal transmission effect of financing methods by observing the fluctuation of stock prices after the announcement of the plan, which will provides reliable empirical conclusions and theoretical basis for listed companies to use these financing methods to achieve effective financing and governance. The structure of this paper is: the first part is the introduction; the second part is the domestic and international literature review; the third part is the event research and comparison based on the new market-oriented sample after the new regulation; the fourth part is the research conclusion
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