Bank loans refer to bank loans to enterprises, and enterprises repay bank principal and interest when due;
The main body of issuing bonds is the enterprise itself. To issue bonds, an enterprise needs to reach a certain scale, including assets and profit rate, and the profit should be enough to pay an interest expense of the enterprise in the past three years;
If a bank loans, the threshold is relatively high, need bank review. Relatively speaking, the cost is higher.
Issuance of bonds refers to newly issued convertible bonds. Convertible bonds are bonds issued by companies bought by investors. Within the prescribed time limit, investors can convert it into shares of the company according to a certain proportion, enjoy the rights of equity and give up the rights of bonds;
If the company's share price or other conditions are unfavorable for investors to hold shares, investors can give up the right to convert bonds into shares and continue to hold bonds until maturity.
Because the subscription funds are not as much as the subscription of new shares, although the listing increase of convertible bonds or separable bonds is not as good as that of new shares, the subscription yield is not weaker than that of new shares, or even exceeds that of new shares.
Convertible bonds are bonds that bondholders can convert into common shares of the company at an agreed price at the time of issuance. If the bondholders do not want to convert shares, they can continue to hold the bonds until the repayment period expires to collect the principal and interest, or they can be sold and realized in the circulation market.
If the holder is optimistic about the appreciation potential of the issuing company's shares, he may exercise the right to convert the bonds into shares at a predetermined conversion price after the grace period, and the issuing company shall not refuse.
The interest rate of this bond is generally lower than that of ordinary companies, and the issuance of convertible bonds by enterprises can reduce the financing cost. The holder of convertible bonds also has the right to sell the bonds back to the issuer under certain conditions, and the issuer also has the right to redeem the bonds under certain conditions.
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.
There are two accounting methods for issuing convertible bonds:
One thinks that the equity transfer is valuable and regards this value as capital reserve;
One way is not to confirm the value of the converted shares, but to treat all the issuance income as the income from issuing bonds. The reasons are: first, the value of conversion right is extremely difficult to determine; Second, the conversion right is inseparable from bonds. To retain the conversion right, you must hold bonds, and to exercise the conversion right, you must give up bonds.