What information and matters should be paid attention to when investing in convertible bonds?

According to Article 7 of the Implementation Measures for the Issuance of Convertible Corporate Bonds by Listed Companies, the issuer's application for the issuance of convertible corporate bonds shall be decided by the shareholders' meeting. The resolution of the shareholders' general meeting shall at least include the issue scale, the determination and adjustment principle of the conversion price, the bond interest rate, the conversion period, the period and method of repaying the principal and interest, the redemption clause and the resale clause, the arrangement of allotment to the original shareholders, the use of the raised funds and other matters. Investment in convertible bonds should pay attention to the following basic information:

1. benchmark stock. The benchmark stock refers to the stock that the bondholders of convertible companies can convert their convertible bonds into the common stock of the issuing company.

2. Bond interest rate. The coupon rate of bonds is mainly determined by the current market interest rate level, the credit rating of corporate bonds and the combination of elements of convertible bonds. The lower the market interest rate, the higher the credit rating and the lower the coupon rate.

3. Time limit. The maturity of convertible corporate bonds is positively related to the investment value. The longer the term, the greater the possibility of stock changes and appreciation, and the greater the investment value of convertible corporate bonds. Therefore, for investors, the longer the term of convertible corporate bonds, the better.

4. Transition period. The conversion period refers to the period from the start date to the end date when convertible corporate bonds are converted into stocks. The conversion period of convertible bonds with no specific term is from the listing date of convertible bonds to the trading day when they stop due. Convertible bonds issued by non-listed companies are from the listing date of listed companies to the trading day when convertible bonds stop due.

5. Convert the price. The conversion price refers to the price paid for converting convertible corporate bonds into each share of the company.

6. Redemption terms.

7. Resale clause. Generally speaking, resale refers to the behavior of bondholders of convertible companies to sell their convertible bonds back to investors at a pre-agreed price when the company's stock price is lower than the conversion price in a certain period of time. Some resale clauses promise a certain condition, such as the company's stock will reach the listing target in the future, and once it fails, the resale clauses will be fulfilled. Silk convertible bonds are sold back in the latter way.

8. Mandatory share conversion clause. The compulsory share conversion clause is a clause that the issuer requires investors to convert their convertible corporate bonds into company shares under certain conditions.