Exchangeable bonds Corporate bonds refer to corporate bonds issued by shareholders of listed companies in accordance with the law and can be converted into shares of listed companies held by shareholders in accordance with agreed conditions within a certain period of time.
The difference between private eb and public eb:
1. From the issuer's point of view, issuers of private exchangeable bonds generally belong to small and medium-sized enterprises, and it is difficult to raise funds through public credit bonds themselves. The cost of raising funds through pure private placement bond is high, and they all face the risk of repaying principal and interest at maturity. Therefore, the qualifications of issuers are different.
2. From the investor's point of view, the expected annualized expected return of ordinary credit bond products is relatively fixed, and at the same time, the credit risk exposure is accelerated in the current environment, while the expected annualized expected return of private exchangeable bonds is more flexible. At the same time, if credit default finally occurs, at least pledged shares will be taken as the consideration. Therefore, investors' risk expectation and annualized expected return preference are different.
3. Compared with equity pledge, equity pledge will eventually face the final link of releasing pledge and repaying principal and interest. However, if it is exchanged for exchangeable bonds, there is no need to repay the principal and interest. Private exchangeable bonds may be reduced, and the discount rate is relatively high, but the uncertainty and subsequent workload are large. Therefore, the demands of issuers are different.
4. From the perspective of time flow, private placement EB only needs to be reviewed by the exchange, so in theory, it is faster and has a comparative advantage.