What are convertible bonds? How to buy?

The full name of convertible bond is corporate convertible bond. Convertible bond is a bond that can be converted into shares of a listed company after being held for a certain period of time. It is a special form of bond and itself is category of bonds. Convertible bonds have three major characteristics: debt, equity and convertibility. They have the dual nature of stocks and bonds, are more flexible, and have fixed interest rates.

Convertible bonds are essentially a form of corporate financing. Compared with ordinary corporate bonds, convertible bonds are more flexible and are favored by most investors. Convertible bonds are a special bond issued when a company is short of money. It borrows money from investors in the form of convertible bonds. When the convertible bonds mature, investors can choose to convert the convertible bonds in their hands into the company. For stocks, you can also choose not to transfer them and directly redeem your principal and interest. There are currently no price limits on convertible bonds, but there is a temporary suspension mechanism, and a T+0 trading system is implemented. At the same time, investors need to have a securities account to trade convertible bonds.

How to buy and sell convertible bonds?

1. If you own the company's stocks, you can participate in the company's stock allotment when the number of stocks you hold reaches a certain amount, and you can have priority in purchasing the company's convertible bonds.

2. Direct subscription. Investors directly subscribe for the company's convertible bonds on the day the convertible bonds are issued, which is similar to issuing new shares. After the subscription, they need to wait for the winning lottery.

3. Direct trading. After the convertible bonds are listed, investors can directly buy and sell on the secondary market by entering their codes.

What does mandatory redemption of convertible bonds mean?

When convertible bonds trigger early redemption conditions, the issuer will pay convertible bond holders at a certain price. Forced redemption operation. When mandatory redemption conditions are triggered, the probability of losses on convertible bonds will be relatively high, so investors can sell or convert shares in advance to avoid losses.

Compulsory redemption has the following conditions:

1. Convertible bonds must be in the conversion period, and no compulsory redemption is allowed before entering the conversion period;

2. Within 15-20 trading days, if the issuance price of the convertible bond exceeds 130% of the conversion price, it will be forcibly redeemed;

3. Within 30 days, the convertible bond will be If the normal price falls below about 70%-80% of the conversion price, it will be forcibly withdrawn.