Since September 1, nine convertible bonds, including Xinquan Convertible Bonds, have been declared not to be redeemed in advance, especially Aojia Convertible Bonds, and the conditional redemption clause has not been triggered.
"It's rare to announce no redemption in advance without triggering the redemption clause. At present, in this market environment, people may think that the conversion will cause dilution. It also reflects that listed companies have more confidence in their share prices and can still trigger redemption in the future. " A public convertible bond fund manager in Shanghai said.
In the interview, CBN learned that not redeeming convertible bonds in advance is a decision made by listed companies after triggering the redemption clause and comprehensively considering various factors. The reasons for not redeeming in advance include: the duration of convertible bonds is short, the listed company has made arrangements for project funds, and the balance of convertible bonds is low, so it is not necessary to convert them into shares through the early redemption clause.
It is becoming more and more common not to redeem in advance.
Including Ouka convertible bonds, eight convertible bonds have been declared not to be redeemed in advance since September. If the time is further extended, since July, many convertible bonds have announced that they will not be redeemed in advance after triggering the mandatory redemption clause.
For example, Xinquan shares (603 179. SH) Not exercising the right of early redemption after at least four announcements, Aihua Group (603989. SH) also announced three times that it would not redeem "Aihua Convertible Bonds" in advance.
Up to now, 30 convertible bonds have issued the announcement of non-early redemption this year. Among them, Changxin Convertible Bonds, Radio and Television Convertible Bonds and Lily Convertible Bonds also announced on 20 19 that they would not be redeemed in advance.
CBN pointed out that some convertible bonds have triggered redemption conditions after the previous market rise. In this case, since July, it has become a common phenomenon for listed companies to choose not to redeem.
"Judging from the characteristics of convertible bonds issued by listed companies that choose' no redemption' in the announcement, most of the convertible bonds issued by these companies have the characteristics of small remaining scale, long distance from the resale period and low interest expenses on convertible bonds." A convertible bond trader in Shanghai told CBN.
Statistics show that among the outstanding convertible bonds, Li Ande convertible bonds, Zhonghuan convertible bonds, Tongguang convertible bonds and Luen Thai convertible bonds have more balances. No more than 200 million, and the profit convertible bonds and Jing Rui convertible bonds are less than 654.38+0 billion.
Especially in the evening of September 1 1, Aojiahua (0026 14. SZ) announced that, in combination with the current intrinsic value and the company's current demand for investment funds for project construction, the company decided that in the next 12 months (September 10 to 202 1 day), it is particularly noteworthy that Ouka convertible bonds did not trigger the conditional redemption clause at this time.
"After the listed company announces the redemption, it should prepare corresponding funds as a response in the short term. Therefore, listed companies are reluctant to redeem in advance because of their own capital costs; In addition, the remaining unconverted balance of convertible bonds is small, and even if the conversion is not promoted through redemption, the smooth withdrawal of convertible bonds can be realized. There is no need to issue a redemption announcement and prepare the corresponding redemption funds. " The Shanghai convertible bond trader said.
Relevant persons from the fixed income department of Furong Fund told CBN that this year's GEM refinancing policy was relaxed, and a large number of companies issued fixed-income plans to supplement funds. Redemption of convertible bonds may affect the company's refinancing progress.
"In the long run, listed companies tend to convert investors into stocks to reduce the number of surviving bonds and financial costs. If the conversion is less than expected, the company will probably start the redemption clause and accelerate the withdrawal of debt-to-equity swaps. " The person also said.
Risks of "Irrecallable" Convertible Bonds
Dragged by the stock market, convertible bonds also fell sharply in the past week.
To a certain extent, the announcement of not redeeming convertible bonds in advance has a certain positive effect on stocks. The logic is: promoting the conversion of convertible bonds through early redemption clause is the mainstream way to realize the delisting of convertible bonds. Announcing early redemption will accelerate the conversion of shares into debt-for-equity swaps and exert a certain selling pressure on shares, while announcing not early redemption will slow down the conversion speed and slow down the impact on shares.
"Under the vision that convertible bonds' unwillingness to pay back money' leads to compulsory redemption, listed companies are often more willing to maintain their share prices, which makes stock and convertible bond holders more confident in their share prices. This is a virtuous circle. " The above-mentioned Shanghai convertible bond traders further stated that for listed companies, the conversion progress will surge after the redemption of convertible bonds, and at the same time, a large number of new shares will bring similar selling pressure of "lifting the ban" in the short term, plus the dilution effect of convertible bonds on stock issuance, which may eventually impact the stock price when the market is good.
What needs to be seen is that although there has been a wave of adjustment in the stock market recently, the performance of convertible bonds is flat, but because there are no price limits, T+0 and other factors, convertible bonds can easily become a "paradise" for hot money, which seems to be full of risks and opportunities, especially convertible bonds that are declared "not redeemable".
Analysts said that the reason is that most of the convertible bonds issued by these listed companies that have announced "no redemption" are small in scale and far from the resale period, so there is not only liquidity risk, but also the risk of being speculated by hot money, which often makes these convertible bonds have strong "shares".
According to the relevant person of the fixed income department of Furong Fund, the convertible bonds announced as "non-redeemable", especially the convertible bonds with low unconverted balance, may have certain risks.
For example, Jing Rui convertible bonds with a balance of less than 1 100 million were heated by a wave of hot money in March, and the single-day turnover rate of Jing Rui convertible bonds was as high as 87 19.2 1%. The excessive speculation of this kind of hot money is intended to harvest retail investors crazily, which also causes convertible bonds to deviate from their intrinsic value.
"This kind of convertible bonds often change hands very frequently in the day, and the speculative characteristics are extremely obvious. The overall premium of the convertible bonds after the surge is very high, showing very strong speculative characteristics, so it is not a good investment variety and the investment value is not high. " Some analysts told CBN that investors should pay attention to the risks of such convertible bonds investment, and should make investment decisions according to the fundamentals of listed companies that issue convertible bonds, stock trends and the intrinsic conversion value of convertible bonds to avoid being harvested by hot money.