Summary: | 碩士 === 中原大學 === 國際貿易研究所 === 94 === What are the special peculiarities of the financial instruments, which attract industries to issue convertible bonds, and the investors to participate? The convertible bonds (CBs) are an attractive financing instrument. It has been introduced to principal market as financing vehicles for several decades. Industries intend to issue convertible bonds at rates lower than comparable straight debt. Convertible bond have both - equity and debt features. That’s why attracting investors to its mixed nature of the convertible bond.
In order to realize the elements of CBs issuance, corporation leverage, and the different performance after outstanding convertible securities, this research attempts to investigate correlative finance data. This paper examines the growth opportunity, leverage, and probability to the announcement of convertible bonds issuance in Taiwan, during the period of 1990 through 2004. We discovered a significant positive convertible bond issuing probability, leverage and negative performance reaction to the announcement of CBs. This result confirms to the US market but shows inconsistence with the positive volatility in the Japan market.
We found that three significantly different groups are among: with CB outstanding firms vs. w/o CB outstanding firms, hi-tech firms vs. non hi-tech firms, during a specific different time table of CB issuing. Simultaneously, we predicted the issuing of CB probability through the three-stage least square regression model to analyze what kind of financial characteristics influences industries to issue CB. The results show that low performance, high leverage, large firm’s size, limited shareholder ownership, low earning-price ratio, high cash dividend payout ratio, low fixed assets ratio, high R&D expenditure, and older firms, are effective factors to induce industries to issue CBs. Meaning that firms with good performance tend not to issue CBs; in the other hand, firms with bad performance tend to opt for it; and firms issuing CBs, show a significantly negative influence on company’s performance.
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