A Study on The Impact of Convertible Bond Issuance on The Performance of Listed Companies: A Case Study of Chengdu Bank

Mingqiu Zhang

doi:10.54097/dq1ct323

Authors

Mingqiu Zhang

DOI:

https://doi.org/10.54097/dq1ct323

Keywords:

Convertible Bonds; Chengdu Bank; Financial Resilience.

Abstract

This study investigates the impact of convertible bond issuance on the performance of listed companies, focusing on Chengdu Bank as a case study. Convertible bonds are a significant refinancing tool for listed companies in China. Since the China Securities Regulatory Commission introduced convertible bonds in 2008, their application has become widespread. This paper explores the motivations behind Chengdu Bank's issuance of convertible bonds, such as enhancing financial strength, meeting regulatory requirements, supporting the real economy, and mitigating risks. Utilizing financial data from 2017 to 2024, including ROE, OPGR, and CBI, alongside macroeconomic indicators like GDP growth rate and CPI, this study employs a multiple linear regression model to quantify the effects of convertible bond issuance on the bank's performance. Preliminary findings indicate that Chengdu Bank's performance improved significantly during and after the issuance years, suggesting that convertible bonds effectively bolster financial resilience and operational efficiency. This research provides valuable insights for banks considering similar refinancing strategies to optimize capital structure and enhance risk management.

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