Quite simply, people who have bonds in their hands can be converted into stocks through debt-to-equity swaps and become veritable shareholders, enjoying all the rights and interests of the company.
But it is bad news for those who hold stocks in advance, because the number of stocks will increase, which will bring certain difficulties to stock speculation.
2. What is the conversion of convertible bonds into shares?
Convertible bonds are called convertible corporate bonds. In the current domestic market, it refers to bonds that can be converted into company stocks under certain conditions. Convertible bonds have the dual attributes of creditor's rights and options, and their holders can choose to hold bonds until maturity to obtain the company's principal and interest; You can also choose to convert it into stocks within the agreed time and enjoy dividends or capital appreciation.
For investors who already hold convertible bonds, they are more concerned about the trend of stock prices besides enjoying a small profit from placing. What effect does the company issue convertible bonds have on the stock, whether it is good or bad, which is the key.
Three. Main characteristics of exchangeable bonds
Exchangeable bonds and their underlying stocks belong to different issuers. Generally speaking, the issuer of exchangeable bonds is the controlling parent company, while the issuer of underlying stocks is the listed subsidiary.
The subject matter of exchangeable bonds is the shares of subsidiaries held by the parent company. Generally, the issuance of exchangeable bonds will not increase the total share capital of its listed subsidiaries, but will reduce the shareholding ratio of the parent company to the converted subsidiaries.
Exchangeable bonds provide a low-cost financing tool for fundraisers. Because exchangeable bonds give investors the right to convert stocks, their interest rate is lower than that of ordinary bonds with the same term and credit rating. Therefore, even if the exchangeable debt-to-equity swap is unsuccessful, the issuer's debt repayment cost is not high, which has no impact on listed subsidiaries.
Legal basis:
According to Article 16 of the Securities Law, the public offering of corporate bonds shall meet the following conditions:
(a) the net assets of a joint stock limited company are not less than 30 million yuan, and the net assets of a limited liability company are not less than 60 million yuan;
(2) The accumulated bond balance does not exceed 40% of the company's net assets;
(3) The average distributable profit in the last three years is enough to pay the interest of corporate bonds for one year;
(4) The investment of the raised funds conforms to the national industrial policy;
(5) The bond interest rate shall not exceed the interest rate level stipulated by the State Council;
(six) other conditions stipulated by the State Council.
Brief summary:
Is it good or bad to convert convertible bonds into shares? For creditors, it is good, and for the first batch of shareholders, it is bad. Quite simply, people who have bonds in their hands can be converted into stocks through debt-to-equity swaps and become veritable shareholders, enjoying all the rights and interests of the company.