the forced redemption of convertible bonds refers to the conversion of all creditors into shareholders by the convertible bond issuing company, that is, the convertible bonds into stocks.

1. Shareholders are investors of joint-stock companies. According to the status of shareholders, it can be divided into institutional shareholders and individual shareholders Institutional shareholders refer to legal persons and other organizations that enjoy shareholder rights. Institutional shareholders include all kinds of companies, all kinds of enterprises owned by the whole people and collectives, all kinds of non-profit legal persons and funds and other institutions and organizations. Individual shareholders refer to ordinary natural person shareholders.

2. Convertible bonds are bonds that bondholders can convert into ordinary shares of the company at the price agreed at the time of issuance. If the bondholders do not want to convert, they can continue to hold the bonds until the repayment period expires to collect the principal and interest, or sell them in the circulation market for realization.

3. callable bonds, also known as "callable bonds", refer to bonds that the issuer has the right to forcibly redeem from bondholders at a certain time and at a certain price, which can be regarded as a combination of bonds and call options. When the market interest rate drops to much lower than the coupon rate of redeemable bonds, the debtor will redeem the bonds if he thinks it is more economical to redeem them and reissue them at a lower interest rate than to continue to pay interest on the existing bonds in coupon rate.

Convertibility:

Convertibility is an important symbol of convertible bonds, and bondholders can convert bonds into stocks according to agreed conditions. Converting shares is an option that investors enjoy and ordinary bonds do not have. Convertible bonds are clearly stipulated at the time of issuance, and bondholders can convert bonds into ordinary shares of the company at the price agreed at the time of issuance. If the bondholders do not want to convert, they can continue to hold the bonds until the repayment period expires to collect the principal and interest, or sell them in the circulation market for realization. If the holder is optimistic about the stock appreciation potential of the issuing company, he can exercise the conversion right after the grace period and convert the bonds into stocks at the predetermined conversion price, and the issuing company shall not refuse. Because of its convertibility, the interest rate of convertible bonds is generally lower than that of ordinary corporate bonds, and issuing convertible bonds by enterprises can reduce the financing cost.

convertible bond holders also have the right to sell bonds back to issuers under certain conditions, and issuers have the right to redeem bonds under certain conditions.

Convertible bonds have the dual characteristics of bonds and stocks, which are attractive to both enterprises and investors. In 1996, our government decided to select qualified companies to carry out the pilot project of convertible bonds. In 1997, it promulgated the Interim Measures for the Administration of Convertible Corporate Bonds. In April 21, China Securities Regulatory Commission issued the Implementation Measures for the Issuance of Convertible Corporate Bonds by Listed Companies, which greatly standardized and promoted the development of convertible bonds.

convertible bonds have the characteristics of dual options. On the one hand, investors can choose whether or not to convert shares, and bear the cost of lower interest rate for converting bonds; On the other hand, the issuer of convertible bonds has the right to choose whether to implement the redemption clause or not, and for this reason, it has to pay a higher interest rate than convertible bonds without redemption clause. Dual option is the most important financial feature of convertible corporate bonds, which limits the risks and returns of investors and issuers within a certain range, and can be used to hedge stocks and obtain more certain returns.