On December 13, Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) (603707) issued the last suggestive announcement on the redemption of “Jian 20 convertible bonds”. The announcement said that after the closing of the market on December 14, the “Jian 20 convertible bonds” that have not been converted into shares will be frozen, the trading and conversion will be stopped, and all bonds will be forcibly redeemed at the price of 100.298 yuan / piece (the face value of the bond is 100 yuan / piece plus the accrued interest of the current period).
As of the closing on December 13, Jian 20 convertible bonds closed at 142 yuan. This means that if investors do not convert shares or sell before the closing on December 14, they may face a loss of nearly 30%.
“Jian 20 convertible bonds” will be forcibly redeemed
On December 13, Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) issued a suggestive announcement that during the period from November 2, 2021 to November 22, 2021, the closing price of the company’s shares for at least 15 consecutive trading days was not lower than 130% (i.e. 37.86 yuan / share) of the current conversion price (29.12 yuan / share) of “Jian 20 convertible bonds”, and the “conditional redemption clause” of “Jian 20 convertible bonds” had been triggered.
Before the closing of the market on December 14, 2021 (including the date of redemption registration), the holders of “Jian 20 convertible bonds” can choose to continue trading in the bond market or convert them into shares of the company at the conversion price of 29.12 yuan / share.
From the trading day next to the redemption registration date (December 15, 2021), “Jian 20 convertible bonds” will stop trading and share conversion. The company will redeem all the “Jian 20 convertible bonds” not converted into shares at the redemption price of 100.298 yuan / piece, and entrust zhongdeng Shanghai branch to distribute the redemption money. After the redemption, “Jian 20 convertible bonds” will be delisted in Shanghai Stock Exchange.
The company suggests that the redemption price of this convertible bond may be quite different from the market price of “Jian 20 convertible bond”, and the compulsory redemption may lead to the risk of investment loss. If the “Jian 20 convertible bonds” held by investors are pledged or frozen, it is recommended to release the pledge and freeze in advance to avoid the situation that the transaction cannot be forcibly redeemed.
In fact, prior to this, Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) has successively issued several suggestive announcements, suggesting that the holders of Jian 20 convertible bonds have the risk of investment loss due to this forced redemption.
According to the data, as of December 13, the balance of non convertible shares of “Jian 20 convertible bonds” was 136 million yuan, and the proportion of non convertible shares was 10.75%.
four convertible bonds face forced redemption this week. This bond may lose nearly 43% due to improper operation
Data show that a total of four bonds are facing compulsory redemption this week. In addition to jian20 convertible bonds, there are three bonds: Longli convertible bonds, Zhongtian convertible bonds and Jingyan convertible bonds. The redemption registration dates are December 15, 16 and 17 respectively. Among them, if Zhongtian convertible bonds are not sold or converted into shares, they may face a loss of nearly 43% (calculated at the closing price on the 13th).
3 companies said they would redeem bonds
In addition, Zhejiang Weiming Environment Protection Co.Ltd(603568) , Zhejiang Grandwall Electric Science&Technology Co.Ltd(603897) , Zhejiang Three Stars New Materials Co.Ltd(603578) also announced that the company decided to redeem the relevant bonds in advance.
Zhejiang Weiming Environment Protection Co.Ltd(603568) on December 7, it announced that the company’s shares had triggered the redemption terms of “Wei 20 convertible bonds”, and the company decided to exercise the early redemption right of “Wei 20 convertible bonds”. Before the closing of the market on the redemption registration date, the holders of “Wei 20 convertible bonds” can choose to continue trading in the bond market or convert them into shares of the company at the conversion price of 21.71 yuan / share. After the closing of the redemption registration date, the “Wei 20 convertible bonds” that have not been converted into shares will stop trading and conversion, and will be forcibly redeemed at the price of 100 yuan / piece of bond face value plus accrued interest in the current period. After the redemption, “Wei 20 convertible bonds” will be delisted in Shanghai Stock Exchange.
Zhejiang Grandwall Electric Science&Technology Co.Ltd(603897) on December 11, it was announced that the company’s shares had triggered the redemption terms of “Great Wall convertible bonds”, and decided to exercise the early redemption right of “Great Wall convertible bonds” and redeem all the “Great Wall convertible bonds” registered on the “redemption registration date”. Before the closing of the redemption registration date, the holders of “Great Wall convertible bonds” can choose to continue trading in the bond market or convert them into shares of the company at the conversion price of 22.35 yuan / share.
Zhejiang Three Stars New Materials Co.Ltd(603578) on December 13, it was announced that the company’s shares had triggered the conditional redemption clause of “Samsung convertible bonds” and decided to exercise the right of early redemption. Before the closing of the redemption registration date, the holders of “Samsung convertible bonds” can choose to continue trading in the bond market or convert them into shares of the company at the conversion price of 13.76 yuan / share (the holders of convertible bonds can consult the opening securities company for specific matters of share conversion). After the closing of the redemption registration day, the “Samsung convertible bonds” that have not been converted into shares will be frozen, the trading and conversion will be stopped, and the company will forcibly redeem the bonds according to the face value of 100 yuan / piece plus the accrued interest of the current period.
these bonds may have met the mandatory redemption terms
In addition, some convertible bonds have reached the strong redemption trigger ratio of 130% of one of the strong redemption conditions of convertible bonds, which may have triggered or close to triggering the strong redemption conditions, including Jinhe convertible bonds, sun convertible bonds, Enjie convertible bonds, Junda convertible bonds, Jinneng convertible bonds, Changxin convertible bonds, Samsung convertible bonds, Baotong convertible bonds, etc, Investors holding such convertible bonds can pay more attention to the relevant announcement information of listed companies.
It is worth mentioning that, according to historical data, most convertible bonds choose not to redeem in advance after meeting the redemption terms. In 2021, after the convertible bonds issued by 85 listed companies triggered the redemption terms, a total of 166 non early redemption announcements were issued, mainly in the second half of the year.
However, Huachuang Securities said that as of December 10, 2021, 64 convertible bonds had been announced to be redeemed in advance, of which 58 had been delisted and the other 6 were in the process of redemption registration.
Most early redemption cases occur within two years of listing. Among the 58 convertible bonds announced for early redemption and delisting in 2021, 43% of the early redemption cases occurred within one year after the listing of convertible bonds, and 29% of the early redemption cases occurred in the second year after the listing.
how to avoid losses caused by forced redemption of convertible bonds?
At present, there are two methods: the first is to sell convertible bonds, and the second is to convert shares in time.
According to the first method, the selling operation is the same as the stock selling operation, which does not require too many skills.
According to the second method, we need to find the corresponding “debt to equity swap” function module in the stock speculation software. Take East Money Information Co.Ltd(300059) as an example, you need to click more buttons on the home page.
Then click the “debt to equity” button.
After logging in the account, find the convertible bonds you hold in the drop-down menu and follow the prompts.
(Securities Times)
