Convertible bonds refer to bonds that holders can convert into a certain number of other securities at a certain proportion or price within a certain period of time.
Convertible bond is the abbreviation of convertible corporate bond, which is a special corporate bond that can be converted into common stock at a specific time and under specific conditions. Convertible bonds have the characteristics of both creditor's rights and equity.
Convertible bond is in English: convertible bond (or convertible debt). Bonds with conversion characteristics issued by companies. In the prospectus, the issuer promises to convert the bonds into common shares of the company at the conversion price within a certain period of time. The conversion function is an obligation of the bonds issued by the company. The advantages of convertible bonds are the fixed income that ordinary shares do not have and the appreciation potential that ordinary bonds do not have.
1. What are exchangeable bonds and convertible bonds, and what is their relationship?
1. Exchangeable bonds are short for "bonds that can exchange shares of other companies". Exchangeable bonds are simply the reduction of shares by major shareholders. First, there must be a basis for issuing corporate bonds, and then an option is attached. Buyers can convert the purchased bonds into shares of the designated company within a specified time range. Note that it is essentially a new stock, which can be converted into shares of the issuing company.
2. Convertible corporate bonds are short for "convertible corporate bonds". Convert into common stock at a specific time when certain conditions are met. In fact, it is to reduce the shares held by shareholders of the company.
3. Relationship between them: In a sense, convertible bonds belong to a kind of convertible bonds.
2. What is the main difference between convertible bonds and exchangeable bonds?
1. Convertible bonds are future new shares issued by the issuer itself, while exchangeable bonds are shares held by other companies.
2. We should pay attention to that the exchangeable bonds exchange the original shares, not the new ones. Convertible bonds will expand the issuer's total share capital; In the case of convertible bonds, the total share capital of the target company will not change.
3. The time limit for conversion into stocks is different. The starting point of both terms is from the date of the end of bond issuance. However, convertible corporate bonds can be converted into company stocks after six months; It takes twelve months for an exchangeable company to be converted into shares to be exchanged.