Analysis of Motives and Influences of East Money Convertible Bond Financing

Abstract

Convertible bonds are fully known as convertible corporate bonds. Since the CSRC issued new financing rules in 2017, convertible bonds have developed rapidly without relevant restrictions. As an important investment and financing tool in the financial market, the orderly development of convertible bonds is very important to maintain financial stability. It is necessary to pay attention to its current situation and study the Countermeasures for its healthy development. On the basis of the existing research, it is found that the motivation of issuance includes easing the conflict of interest, reducing the cost of financing, optimizing the capital structure, etc., and it will have an impact on the company's stock price, equity dilution and predatory behavior of major shareholders; Combined with the case analysis, it is found that there are some problems in the current convertible bond issuance, such as the slow progress of convertible bond investment and education, the inadequate supervision of the issuance market, and the imperfect regulations on the termination of convertible bond transactions. Therefore, this paper puts forward some suggestions for investors, original shareholders and relevant regulatory framework, so as to promote the healthy development of convertible bonds.