Exchangeable corporate bonds (EB) are long-standing fixed-income securities in mature markets. It gives bond investors the right to convert bonds into shares of other companies held by issuers within a certain period of time according to pre-agreed conditions.
Convertible Bonds (CB) is a kind of corporate bonds, which gives holders the right to choose whether to convert their bonds into shares of the issuing company or another company according to their own free will within a certain period after issuing bonds.
Second, the same point:
1, the same face value. They are all 100 yuan each.
2. The terminology is the same. It is the shortest year and the longest six years.
3. The issue rate is low. Generally speaking, the issue interest rate will be significantly lower than the interest rate of ordinary corporate bonds or the interest rate of bank loans during the same period.
4. Both conversion period and conversion ratio have been specified.
5. Redemption and resale terms can be agreed. That is, when the conversion price is higher or lower than the target stock by a certain margin, the company can redeem it and investors can sell the bonds back. Whether convertible bonds are agreed in actual operation depends on the specific terms of future offering and issuance, which have been agreed in the previous convertible bonds.
Third, differences.
1, issuer and debtor are different. Exchangeable bonds are shareholders of listed companies; Convertible bonds themselves are listed companies.
2. The purpose of issuing bonds is different. The purpose of issuing exchangeable bonds is special, usually not a specific investment project. The purpose of issuing bonds includes equity structure adjustment, investment exit, market value management, asset liquidity management and so on. Issue convertible bonds for specific investment projects.
3. The sources of the exchange of shares are different. Exchangeable bonds are the shares of other companies held by the issuer, and convertible bonds are the new shares issued by the issuer itself in the future.
4. The impact on the company's share capital is different. Convertible bonds will increase the issuer's total share capital and dilute earnings per share; Converting exchangeable bonds into shares will not change the total share capital of the target company, nor will it affect the diluted income.
5. Mortgage guarantee methods are different. When a major shareholder of a listed company issues exchangeable bonds, it shall use the listed shares it holds for exchange as collateral. In addition, the issuer can also provide guarantees for exchangeable bonds. The issuance of convertible corporate bonds shall be guaranteed by a third party, except for companies whose audited net assets at the end of the latest period are not less than/kloc-0.5 billion yuan.
6. The conversion price is determined in different ways. The price of convertible bonds exchanged per share shall not be less than 90% of the average transaction price of listed companies in the 30 trading days before the announcement of the prospectus; The conversion price of convertible bonds shall not be lower than the average price of the company's shares in the 20 trading days before the announcement of the prospectus and the average price of the previous trading day.
7. The conversion period is different. Exchangeable corporate bonds can only be exchanged for stocks to be exchanged after the end of issuance 12 months. It is not clear whether it is European or Bermuda-style stock exchange; Convertible corporate bonds can be converted into company shares six months after the issuance. In reality, convertible bonds are Bermuda-style convertible bonds, that is, they can be converted into stocks on any trading day after six months of issuance.
8. The downward revision of the conversion price is different. There is no provision that convertible bonds can revise the conversion price downwards; Convertible bonds can revise the conversion price downward when certain conditions are met.