Bondholders can choose to convert bonds into equity shares. If the underlying stock price exceeds the conversion price, investors can choose to convert the bonds into ordinary shares, otherwise they are held as ordinary corporate bonds with a certain bond floor (Bond Floor).
|Securities / Coupon / Maturity|
|SINOPE 3.25 04/28/25||USD|
|Huarong Asset Management|
|HRAM 4.25 11/07/27||USD|
- Normally low or zero coupons, there may be buyback clauses, and Puttable clauses that are investor rights.
- CBs also have interest rate risk, credit risk, liquidity risk, same as corporate bonds.
- Face Amount (Denomination)
- Coupon rate
- Issue date / issue price
- Maturity Date / Maturity Redemption Price
- Conversion Price
- Conversion ratio = face amount / conversion price
- Parity = stock price × (conversion ratio / denomination × 100)
- Premium = (market price / parity) -1