The money for placing convertible bonds shall be paid before 4: 00 pm on the day of placing. Investors should ensure that the personal account has sufficient funds, and the system will automatically complete the deduction.
Convertible bonds refer to bonds that holders can convert into a certain number of other securities at a certain proportion or price within a certain period of time.
Convertible bond is the abbreviation of convertible corporate bond, which is a special corporate bond that can be converted into common stock at a specific time and under specific conditions. Convertible bonds have the characteristics of both creditor's rights and equity.
Convertible bond in English is: convertible bond (or convertible debt). Bonds with conversion characteristics issued by companies. In the prospectus, the issuer promises to convert the bonds into common shares of the company at the conversion price within a certain period of time. The conversion function is an obligation of the bonds issued by the company. The advantages of convertible bonds are the fixed income that ordinary shares do not have and the appreciation potential that ordinary bonds do not have.
Convertible bonds have several elements, which basically determine the overall characteristics of convertible bonds, such as conversion conditions, conversion price, market price and so on.
1. Validity period and conversion period. As far as convertible bonds are concerned, their validity period is the same as that of ordinary bonds, which refers to the period from the date of issuance to the date of repayment of principal and interest. The conversion period refers to the period from the start date to the end date when convertible bonds are converted into ordinary shares. In most cases, the issuer stipulates a specific conversion period, during which the holders of convertible bonds are allowed to convert into the issuer's shares according to the conversion ratio or conversion price. China's "Measures for the Administration of Securities Issuance of Listed Companies" stipulates that the shortest term of convertible corporate bonds is 1 year, and the longest is 6 years, and they can only be converted into company stocks within 6 months from the date of issuance.
Stock interest rate or dividend yield. Coupon rate (or dividend yield of convertible corporate bonds) refers to the coupon rate (or dividend yield of preferred shares) of convertible corporate bonds, which is generally lower than the equivalent conditions determined by the issuer according to the current market interest rate level, corporate bond credit rating and issuance terms. For convertible corporate bonds, 1 interest is paid in half a year or 1 year, and the principal of unconverted bonds and the last interest of 1 interest are repaid within 5 working days.
3. Conversion ratio or conversion price. The conversion ratio refers to the number of shares that convertible bonds of a certain denomination can be converted into ordinary shares. Expressed as:
Conversion ratio = face value of convertible bonds/conversion price
The conversion price refers to the price paid for converting convertible bonds into common shares. Expressed as:
Conversion price = face value of convertible bonds/conversion ratio
4. Redemption clauses and resale clauses. Redemption means that the issuer can redeem the issued convertible corporate bonds in advance after a period of issuance.
The redemption condition is generally that when the company's shares continue to be higher than the conversion price for a certain period of time, the company can repurchase the unconverted convertible corporate bonds at the redemption price agreed in advance.
Sell-back refers to the behavior that the bondholders of convertible companies sell their convertible bonds to the issuer at a pre-agreed price when the company's shares are lower than the conversion price for a certain period of time.
Redemption clause and resale clause are the specific market conditions for redemption and resale when convertible bonds are issued.
5. Conversion price amendment clause. The conversion price correction refers to the change of the issuer's shares due to the company's issuance of shares, allotment, additional issuance, division, merger, subdivision and other reasons, which leads to the decline of the par value of the company's shares and the necessary adjustment of the conversion price.