정부의 전환사채 건전성 제고 방안 도입효과 분석：2021.10.28. ｢증권의 발행 및 공시 등에 관한 규정｣ 개정을 중심으로 = Analysis of the Effects of Government Policies to Enhance the Soundness of Convertible Bonds：Focusing on the Amendment to the Regulations on Issuance and Disclosure of Securities(October 28, 2021)

다국어 초록 (Multilingual Abstract)

[Purpose] On October 28, 2021, the Korean government amended the Regulations on Issuance and Disclosure of Securities with the aim of enhancing the soundness of convertible bonds. The amendment includes two key provisions：first, it imposed limits on the exercise of call options by major shareholders and related parties；second, it mandated an ‘upward adjustment’ of the conversion price when the stock price rises after the conversion price has been adjusted downward. This study aims to analyze and present whether these government policies to improve the soundness of convertible bonds have been effective.
[Methodology] To achieve the research objective, this study examines 1,728 firms that disclosed private placements of convertible bonds between 2020 and 2024. Specifically, it investigates whether the proportion of call option grants and repricing provisions decreased following the regulatory amendment, and whether the disclosure effect of convertible bond issuance became more pronounced.
[Findings] The analysis shows that there was no significant difference in the proportion of call option grants before and after the amendment to the Regulations on Issuance and Disclosure of Securities. However, the proportion of repricing provisions significantly decreased after the amendment. This result indicates that the regulatory change mandating upward adjustments of the conversion price influenced the decision－making of firms issuing convertible bonds. Furthermore, the disclosure effect of convertible bond issuance was found to be significantly greater after the regulatory amendment, suggesting that the reform enhanced the soundness of convertible bonds and had a positive impact on investors.
[Policy Implications] This study is meaningful in that it empirically verifies the effectiveness of government policy implementation. The government has continued to pursue institutional improvements related to convertible bonds even after the 2021 amendment to the Regulations on Issuance and Disclosure of Securities. It is necessary to continuously monitor how such policies affect the market to ensure their effectiveness.