On December 27, the subscription of Societe Generale convertible bonds was opened. The corresponding positive shares were Industrial Bank Co.Ltd(601166) and the issuance scale was 50 billion yuan, which was the largest convertible bond of A-Shares in the year.
According to the statistics of East Money Information Co.Ltd(300059) choice, as of December 27, 117 convertible bonds were issued during the year, a year-on-year decrease of 46%; The issuance scale of convertible bonds reached 282 billion yuan, a year-on-year increase of 2.73%. Among them, the scale of convertible bonds of five banks reached 110 billion yuan, accounting for 39.36% of the total scale; They are 50 billion yuan of Societe Generale convertible bonds, 20 billion yuan of Bank of South China convertible bonds, 20 billion yuan of Bank of Shanghai convertible bonds, 15 billion yuan of Bank of Hangzhou convertible bonds and 5 billion yuan of Bank of Jiangsu convertible bonds.
From the perspective of the investment direction of the raised funds, taking Societe Generale convertible bonds as an example, the announcement shows that all the funds raised by the issuance of convertible bonds will be used to support the future business development of Industrial Bank Co.Ltd(601166) after deducting the issuance expenses, and will be used to supplement the core Tier-1 capital after the convertible bond holders convert their shares in accordance with the relevant regulatory requirements.
"Banks frequently issue convertible bonds, which shows that banks have obvious demands for the supplement of core tier 1 capital." Chen Li, chief economist of Chuancai securities and director of the Research Institute, told the Securities Daily that the capital pressure of small and medium-sized banks is relatively large. Under the intensified market competition and macro environmental pressure, the bank's profit growth slows down and the pressure on the disposal of non-performing assets increases.
Chen Li further analyzed that, first of all, since the epidemic, finance has increased its support for the real economy, the growth rate of bank asset scale has accelerated, and the ability to supplement capital with retained profits is limited; Secondly, compared with other financing methods, the financing cost of convertible bonds is lower. For the issuer, the longer term of convertible bonds is more conducive to solve the problem of short-term capital shortage, and the repayment pressure does not need to be considered in a short time; Thirdly, the regulatory policy puts forward higher regulatory capital requirements for banks included in the list of systemically important banks in China, and it is expected that more banks will put the convertible bond issuance plan on the agenda.
"There are many reasons for the increase in the issuance scale of bank convertible bonds this year: on the one hand, last year, banks strengthened their efforts to reduce fees and transfer profits to support the real economy, provided faster credit, increased the corresponding capital consumption, and increased the demand for capital supplement; on the other hand, the evaluation of China's systemically important banks is also continuously promoted, which is of great significance to China's important systemic banks The capital bottom line requirements have been improved. Compared with other refinancing methods, convertible bonds have the advantages of low cost and high efficiency, and have the potential ability to supplement the bank's core tier 1 capital, which is favored by the bank. " Wang Yifeng, chief financial analyst of the Institute, told the Securities Daily.
"With the hot issuance of 'fixed income +' funds, the market demand for the allocation of convertible bonds continues to rise, which provides opportunities for the issuance of many large-scale convertible bonds and promotes the significant increase of bank convertible bond issuance this year." Jin Yi, chief bond analyst, said in an interview with Securities Daily.
Different from previous years, most convertible bonds issued this year have a maturity of 6 years, and only a few have a maturity of less than 6 years. According to the data of East Money Information Co.Ltd(300059) choice, among the 117 convertible bonds issued, only 7 have a term of 5 years or less, and the rest are 6 years. In contrast, nearly 30% of the convertible bonds in the same period last year have a maturity of less than 6 years.
"An important purpose for listed companies to issue convertible bonds is to raise funds at low cost." Chen Li said that this year's economic downward pressure is great, and the company's financing demand increases. The vast majority of convertible bonds this year have a six-year term, and a longer term can alleviate the company's short-term capital turnover pressure. And it is more conducive for investors to have more opportunities to convert shares, which can alleviate the pressure of issuers to redeem bonds when convertible bonds mature.
(Securities Daily)
