The Exploratory Research on the Convertible Bonds Design at Taiwan

• Main Authors: Han-Yu Chen, 陳涵酉
• Other Authors: Sou-Shan Wu
• Format: Others
• Language: zh-TW
• Published: 2000
• Online Access: http://ndltd.ncl.edu.tw/handle/70282887281527264910

碩士 === 國立交通大學 === 經營管理研究所 === 88 === Financing by convertible bonds (CB) is one of the important way to get money. But for the complexity of the convertible, to estimate the value of CB and to measure the effect of issuance is very difficult. We will study the factors of designing CB's important clauses. At the first, we get know about the status quo of CBs at Taiwan. And we estimate the influence of designing clauses to CB's value. Then, by articles review, we understand the cause of issue CB, the characteristic of the firms, and the effect of issue CB. On the theorical structure of security design, the agency problem may be eased by proper designing bond clauses. And at the condition of information asymmetric, we can also get know about characteristic of the firm by the signaling effect of CB. To study the CB's clauses, we use A. post-conversion equity ownership, B. maturity, C. relative length of call period protection as the endogenous variables of the model. We use three stages least square method (3SLS) to explore the endogenous relationship of the three variables and the important factors of CB design. It shows that A. firm size, B. financial leverage, C. credit quality, D. abnormal earning, E. stocks proportion holding by directorate will have significant influence to CB design. We argue that CB issuers signal the business risk and the growth opportunity to the market and ease agency problem by designing CB's clauses. We will get the same result by using ordinary least square method (OLS). But we find there is no significant relation among the three endogenous variables. It means that the endogenous relation among CB clauses is not the emphasis when designing CB.