1. Credit bonds:
Credit bonds refer to bonds issued by enterprises (non-financial institutions) and based on corporate credit. The issuers of credit bonds usually include various industrial and commercial enterprises, infrastructure companies and real estate companies. The issuance conditions of credit bonds are relatively loose, as long as they meet the requirements of relevant laws and regulations. Because the issuer of credit bonds has no national credit endorsement, its credit risk is relatively high.
2. Corporate bonds:
Corporate bonds are bonds issued by institutions affiliated to central government departments, wholly state-owned enterprises or state-controlled enterprises. The issuance conditions of corporate bonds are relatively strict and need to be approved by the National Development and Reform Commission or the China Securities Regulatory Commission. Because the issuer of corporate bonds has a national credit endorsement, its credit risk is relatively low.
3. Convertible bonds:
Convertible bond is a special kind of bond, which has both the characteristics of bond and the right to convert into stock. The issuer of convertible bonds is usually a listed company. The issuance conditions of convertible bonds are relatively strict and need the approval of the CSRC. The risks and benefits of convertible bonds are between credit bonds and corporate bonds. Because it has the right to convert into stocks, it has high rising potential.
To sum up, there are some differences among credit bonds, corporate bonds and convertible bonds in terms of issuers, issuance conditions, risks and benefits. When choosing bonds, investors need to rationally allocate different types of bonds according to their own risk tolerance and investment objectives.