From February 22 to March 8, there will be a wave of early redemption of convertible bonds, and a total of 9 convertible bonds will be redeemed in advance. Among them, the convertible bonds redeemed this week (February 21 to February 25) include biyin convertible bond, Zhongding convertible bond 2, Galaxy convertible bond and xingshuai convertible bond.
At present, the latest price of Galaxy convertible bonds is 265.98 yuan. If you do not choose to sell or convert shares, you will redeem them at the price of 100.13 yuan. If you do not convert shares or sell them in time, the loss may reach 62%.
It is worth mentioning that investors holding convertible bonds on gem or Kechuang board need to pay particular attention to that if the trading authority of relevant sectors is not opened, they cannot convert shares and can only choose to sell or wait for redemption before redemption registration.
In addition, investors also need to pay attention. If the circulating face value of convertible bonds is less than 30 million yuan, the trading of convertible bonds will be stopped in advance. If investors who have not opened the trading authority of relevant sectors do not operate in time, they will be unable to convert shares and can only face forced redemption losses.
Four convertible bonds such as biyin convertible bonds were redeemed in advance, and the highest loss or over 60% was not operated
Biyin convertible bonds, Zhongding convertible bonds 2, Galaxy convertible bonds and xingshuai convertible bonds ushered in the last operation day this week. The redemption registration date of biyin convertible bonds is February 22, Zhongding convertible bonds 2 is February 23, and Galaxy convertible bonds and xingshuai convertible bonds are February 24.
After the redemption registration date, the convertible bonds will be forcibly redeemed, and investors may incur a lot of losses. For example, the redemption registration date of biyin convertible bonds is February 22, 2022, and the redemption price is 100.42 yuan / piece. Before the closing of the market on the 22nd, biyin convertible bonds holders can choose to continue trading in the bond market or convert them into shares of the company at the conversion price of 14.6 yuan / share.
If investors do not convert or sell shares in time and the convertible bonds are forcibly redeemed, based on today’s closing price, each convertible bond held will lose 70.58 yuan, with a loss range of 41.27%.
In addition, based on today’s closing price, if zhongdingzhuan 2 investors do not operate and wait for redemption, the loss may reach 39.79%, the holders of Galaxy convertible bonds may lose 62.35% if they do not operate, and the holders of xingshuai convertible bonds may also lose 28.34% if they do not operate.
more than 770000 convertible bonds of Zhengyuan were not converted into shares, and the overnight loss was 38.19%
Previously, Zhengyuan convertible bonds ushered in the last operable day on February 17. According to the arrangement, the “Zhengyuan convertible bonds” that have not been converted into shares after the closing of the day will be forcibly redeemed at the price of 100.67 yuan / piece. After the redemption, the “Zhengyuan convertible bonds” will be delisted in Shenzhen Stock Exchange.
It is worth mentioning that after February 17, 771791 yuan convertible bonds were still not converted into shares, with a proportion of 44.1%. As of the closing of the day, the closing price of Zhengyuan convertible bonds was 162.88 yuan / piece, and the forced redemption price was 100.67 yuan / piece, which means that the value of this part of convertible bonds evaporated nearly 48 million overnight, and this part of investors have to bear a loss of 38.19%.
Zhejiang Zhengyuan Zhihui Technology Co.Ltd(300645) previously, it has issued risk warning announcements on redemption and delisting of convertible bonds for many times. Why is there still 77 million bond balance that has not been converted into shares?
Among them, a big reason may be that investors have not opened the gem trading authority, resulting in the inability to convert shares. In the Zhejiang Zhengyuan Zhihui Technology Co.Ltd(300645) stock bar, the reporter saw that many investors said they didn’t know how to convert shares or didn’t open the gem, and didn’t sell on the last trading day.
Other investors may see Zhejiang Zhengyuan Zhihui Technology Co.Ltd(300645) share prices rise one after another and want to make profits on the last trading day. Data show that on February 17, the transaction volume of Zhengyuan convertible bonds reached 795 million yuan, with more investors participating in the transaction.
As can be seen from the above cases, investors holding convertible bonds on gem or Kechuang board need to pay particular attention to whether they have opened relevant trading authority, otherwise they will not be able to convert shares.
The positive shares corresponding to Galaxy convertible bonds and Dongcai Zhuan 3, which ushered in the last operation day on February 24 and February 28, are GEM stocks. The current non convertible balances are 86 million yuan and 8.626 billion yuan respectively, accounting for 51.44% and 54.59% respectively.
pay attention to these points
Listed companies have repeatedly issued announcements to remind the redemption risk, but many investors still hold convertible bonds and “wait” to be redeemed by listed companies at a price basically equivalent to the issue price. According to the analysis, the reason for this situation is that investors do not understand the relevant rules of convertible bonds. At the same time, the convertible bonds that are forcibly redeemed generally have a small negative premium, and some investors think they have found a bargain.
1. Don’t covet a small negative premium
After the announcement of strong redemption, the premium rate of convertible bonds to shares will be greatly reduced, and even negative premium rate will appear as the strong redemption day approaches. Negative premium means that convertible bonds can be converted into shares for arbitrage, but investors need to pay attention to that only when the negative premium rate of convertible bonds is high can there be some arbitrage space, otherwise it is of little significance. If investors do not open the trading authority of the sector, the convertible bonds they hold cannot be converted into shares.
Analysts pointed out that under normal circumstances, the premium rate is negative, indicating that the value of convertible bonds is underestimated and has investment value. But at the stage of impending forced redemption, investors should not take risks.
2. Convertible bonds issued by companies listed on the science and innovation board and the gem shall be subject to sector trading authority
Investors holding convertible bonds related to gem and Kechuang board need to open the trading authority of the board if they want to convert shares. In the face of forced redemption, investors who do not open the relevant trading authority can only sell before the expiration date of forced redemption.
For example, the next nine convertible bonds that were forcibly redeemed, the positive shares corresponding to Galaxy convertible bonds and Dongcai convertible bonds are Foshan Golden Milky Way Intelligent Equipment Co.Ltd(300619) and China stock market news, respectively, which belong to companies listed on the gem. If the investors of the two convertible bonds want to convert shares, they need to open the trading authority on the gem.
3. If the circulating face value of convertible bonds is less than 30 million, the transaction will be stopped in advance
When the balance of convertible bonds not converted into shares is less than 30 million yuan, that is, if the circulating face value is less than 30 million yuan, the trading of convertible bonds will be stopped three trading days after the company issued the relevant announcement, and the trading time of convertible bonds will be advanced. At that time, investors can only convert shares.
In the next half month, there will be 9 convertible bonds facing forced redemption, including biyin convertible bond, Tongde convertible bond, xingshuai convertible bond, Galaxy convertible bond and Baichuan convertible bond. At present, the balance of non convertible shares is less than 100 million yuan, and investors need to pay attention to the risk of stopping trading in advance.
4. Beware of convertible bonds with high conversion premium rate and trigger redemption terms
With the concentrated maturity of non redemption commitments, the number of convertible bonds announced to be redeemed in advance has increased since the beginning of this year, and the valuation of convertible bonds will be compressed after the announcement of strong redemption, which is also what investors need to pay attention to.
According to the analysis, the recent market style switching is obvious, which does not rule out the possibility of announcing the redemption of individual bonds that are not redeemed at present. Especially under the background that the valuation of convertible bonds is still high, we should closely track the redemption to avoid the valuation compression and withdrawal caused by redemption as far as possible.
5. Convertible bonds also have default risk
Convertible bonds are not 100% safe. After maturity, the convertible bonds issued by listed companies need to pay interest on the convertible bonds that have not been converted into shares and cash the principal at maturity.
However, if the company fails to achieve the expected return in its business activities and fails to obtain sufficient repayment funds, it will affect the company’s ability to pay the principal and interest of convertible bonds in full and on time. For convertible bonds with low credit rating, if the company’s fundamentals deteriorate, investors should be cautious in participating in the transaction.
