First of all, the essential difference between convertible bonds and ordinary convertible bonds is that bonds and options can be traded separately. Traditional convertible bonds have both debt and shares, and the characteristic of separate trading convertible bonds is to separate debt and shares, and its liquidity is stronger than that of ordinary convertible bonds. That is to say, after investors who trade convertible bonds separately exercise their subscription rights, their creditor's rights still exist, and they can still hold the principal they expect to repay and earn interest; Once the investors of ordinary convertible bonds exercise their subscription rights, their creditor's rights will cease to exist.
Secondly, there are no reset and redemption clauses for the separated convertible bonds, which avoids that ordinary issuers of convertible bonds often promote the conversion by constantly modifying the conversion price or compulsory redemption, rather than improving the company's operating performance.
Thirdly, the warrants in ordinary convertible bonds generally expire at the same time as bonds, while convertible bonds traded separately are different. The duration of warrants for convertible corporate bonds traded separately shall not exceed the term of corporate bonds, and shall not be less than six months from the date of issuance. After issuance, corporate bonds and warrants are traded in the bond market and warrant market of the exchange respectively, and the bonds will repay the principal and interest at maturity; Warrants can be sold or exercised at maturity.
Finally, compared with ordinary convertible bonds, the information it sends to the market is also very different. Because the design of convertible bonds in China is more similar to equity financing, the market information transmitted by equity financing and debt financing is confused. The detachable convertible bonds have rigid pressure on the company's debt repayment, and the bond financing information transmitted is more obvious.