Bond swaps are bought and sold at almost the same time, effectively and quickly replacing old bonds with a new set of bonds. It is also a method used by the government to extend the maturity of national debt to solve the financial crisis. By issuing new bonds in exchange for the old bonds that are about to expire in the hands of the original national bondholders, generally speaking, the new bonds have a longer term and higher returns. Bond swap is also called bond swap or debt swap.

There are many reasons why investors or creditors may agree to bond swaps. It is one of the common motives of bond swap to replace the bonds that may default before the debt expires. Usually, the bonds exchanged are lower than the expected execution amount, and may even be sold at a loss. The sale of such bonds led to the cancellation of the tax required by the original bondholders, and provided a certain amount of equal or unequal purchases of other bonds of similar value. Generally speaking, new bonds are accompanied by strong credit commitments.

In most cases, the new bonds can't reach the same value as before, so there will be no compulsory write-off measures to ensure the expected profits, which will help to maintain the stability of the portfolio and the overall value of the bonds. The sale of new bonds will generate new taxes. As a last resort to protect creditors' interests, the new bonds obtained by completing the bond swap will be accompanied by higher returns, and a longer repayment time will be set to predict the outcome of asset acquisition.

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Compared with convertible corporate bonds, convertible bonds have their similarities, and their elements are similar to convertible bonds, including coupon rate, maturity, conversion price, conversion ratio and conversion period. For investors, just like holding convertible bonds of listed companies, the investment value is related to the performance of listed companies, and the underlying stocks can be exchanged at the agreed price within the agreed time limit. The first difference is that the issuer is different from the debtor, the former is the shareholder of the listed company, and the latter is the listed company itself; Second, the sources of the exchange of shares are different. The former is the shares of other companies held by the issuer, and the latter is the new shares issued by the issuer itself in the future. Furthermore, the conversion of convertible bonds into shares will expand the issuer's total share capital and dilute earnings per share; Converting convertible corporate bonds into stocks will not lead to changes in the total share capital of the target company, nor will it affect the diluted earnings.