The difference between exchangeable bonds and convertible bonds

Introduction to convertible bonds The full name of convertible bonds is convertible bonds (CB), which are essentially bonds that can be converted into individual stocks. Note that essence is a key. Convertible bonds have two-way characteristics of debt and stock index futures. Holders can not only own the bonds at maturity, so that the borrowing enterprises can pay interest, but also convert them into individual stocks during the commitment period, enjoying the dividend rate or capital gains, which is both oversold and debt-oriented. For investors, he is a stock that guarantees capital.

Introduction to exchangeable bonds The full name of exchangeable bonds is "exchangeable bonds of other listed companies" (commonly known as EB), which refers to the corporate bonds sold by the holders of listed companies by pledging their shares to the custodian. At a certain stage in the future, the holders of such bonds can obtain the shares of listed companies pledged by the issuer with their own bonds according to the standards promised at the time of bond issuance.

The difference between convertible bonds and convertible bonds: convertible bonds, corporate bonds and convertible bonds belong to one kind of bonds, and both of them can get one copy, but there are some differences between them. Today, the wealth manager will talk to you about the difference between convertible corporate bonds and convertible bonds.

1. Convertible corporate bonds mean that bondholders convert bonds into corporate common stock at the price promised at the time of sale. It can be seen that the main body of selling behavior is the listed company itself, while the exchangeable bond refers to the holder of the equity of the listed company pledging his shares to the custodian to sell corporate bonds, and the main body of selling behavior is the company shareholders of the listed company.

2. The harm to the total share capital is different. Convertible corporate bonds may increase the total number of shares of enterprises, thus reducing the earnings per share. The total share capital of convertible bonds is different, and the net assets per share will not change.

3. The time limit for converting into individual stocks is different. Generally, it takes six months for convertible bonds to be converted into individual stocks, and it takes longer for convertible bonds to be converted into individual stocks, generally twelve months.

4. The method of defining stock price is different. When convertible corporate bonds are converted into individual stocks, the price is not equal to the average price of the stock in the first 20 trading hours and the average price of the previous trading hours, while when convertible corporate bonds are converted into individual stocks, the stock price is not equal to 90% of the average price of the stock in the first 30 trading hours.

5. Exchangeable bonds with different contract types are used as loan collateral, and convertible corporate bonds must be used as loan collateral by a third party.

6. The converted stocks come from different convertible bonds. The stocks exchanged are the stocks of other enterprises, and the stocks obtained by convertible corporate bonds are the stocks sold by foreign investors in the future.

7. Convertible corporate bonds with different selling purposes are generally used for project investment, while convertible bonds are not necessarily used for project investment, but can be used for rapid asset management and market value management.

This is the difference between convertible corporate bonds and exchangeable bonds. Investors carefully identify and make stronger decisions.