Category: Money tips Release Date: 2006-01-05
2007 Nian January 19 to January 20, the third national financial work conference held in Beijing. The meeting Premier Wen Jiabao pointed out: "vigorously develop the capital market and insurance markets, to build multi-layer financial market system, to expand the scale and proportion of direct financing", and to develop corporate bonds, corporate bonds issued to expand the scale and improve debt management system for future a period of one of the priorities. In the latest introduction of the "listed corporate securities issued Management Regulations", was first listed as a separate species of refinancing transactions convertible bonds, but also they are still investment opportunities.
"Separation of trading of convertible bonds" --- concept and investment strategies
Jiang Fan Soochow Securities Research Institute
What is the separation of trading of convertible bonds
The full name of separation of trading of convertible bonds is "separation of stock options and bond trading of convertible bonds", which is a mixture of debt and equity financing of species. Separation of trading convertible bonds from the two major components, first, convertible bonds, and second, the stock warrants. Convertible bonds are issued by listed companies, a special kind of bonds, bonds issued in due time to set the price of conversion, the creditor may be based on the market the bonds into stocks, bonds held to maturity can also return the principal and of interest. Stock warrants is within the period specified in the future, in accordance with the provisions of the agreement price of the option of buying and selling stocks that, according to the different rights to buy or sell can be divided into call warrants and put warrants. Therefore, separation of trading convertible bonds have been simply interpreted as "get warrants to buy bonds," the innovative varieties.
Separation of trading convertible bonds and ordinary convertible bonds of the essential difference between bonds and options trading separable. In other words, separation of transactions for investors in the exercise of convertible bonds of the subscription rights, its claims still exist, can still be held to maturity to obtain the return of principal and interest; and ordinary investors in convertible bonds, once the acceptability of the exercise of stock rights, then its claim will cease to exist.
In addition, the separation of convertible bonds and redemption no reset provisions, that will help distribution companies to promote growth through the performance of the positive role of the share transfer, avoiding the ordinary convertible issuers often than not by increasing the company's operating performance, but in continuously revised downward turn mandatory redemption of shares or share transfer methods led to the damage brought to investors. At the same time, separate transactions, holders of convertible bonds and ordinary convertible bonds have been given the same time the holder the right to sell back, which greatly protect the interests of investors.
Furthermore, common stock options in convertible bonds and bonds are generally synchronous maturity, the separation of trading convertible bonds is not the case. "Listed company's securities issued Management Measures" provided that separation of trading convertible bonds "during the existence of warrants does not exceed the duration of corporate bonds, since the issuance of not less than six months from the date of the end" for the separation of trading Warrants lead to increased market risk and shorten the duration of warrants can help reduce speculation.
Separation of Investment Value of Convertible Bond Trading
Separation of the two sides trading of convertible bonds is a win-win variety of innovative investment and financing. For the investment value of this species can be analyzed from two perspectives:
First, a lot of money raised for the company to accelerate its development.
Usually isolated transactions may issue convertible bonds and ordinary convertible corporate bonds, after the accumulated balance of the pre-release one end of the year does not exceed the amount of net assets of 40 percent, but the separation of trading of convertible bonds "expect the warrants attached to all the rows of the right to raise The total amount of funds to be issued does not exceed the amount of corporate bonds, "Therefore, in the case of bonds issued the same scale, the separation of trading convertible bonds to raise funds by the size of convertible bonds to raise funds will be 1-2 times the size.
In addition, the "listed corporate securities issued Management Measures" pointed out: separation of trading of convertible bonds issued should follow the "latest the end of the company's audited net assets of not less than 1.5 billion yuan," "the last three fiscal year, generated from operating activities the average net cash flow of not less than corporate bonds issued this year's interest. " Separation of transactions in bonds, convertible bonds and warrants are separate transactions, the issuer must bear the bond debt service obligations, so "means" on the debt of the issuer filed for a higher solvency requirements. With Investment in the "pecking theory", that is, when the company for their new project financing, it will give priority to the use of internal surplus, followed by the use of bond financing, and finally to consider equity financing. We can easily find a company with debt financing of its relatively good financial position or its strong ability to repay debt, once to raise funds to carry out the project, the Company must be able to get rapid development.
Second, investors receive multiple benefits.
For investors, as opposed to ordinary convertible bonds, investment in convertible bonds trading detachable advantages: First of all, investors can get part of the debt service bond proceeds; Secondly, when the warrant exercise price lower than the positive stock market price, investors can share transfer or transfer of Warrants in the secondary market, arbitrage, and thus obtain the proceeds; and when the warrants exercise price is higher than the market price, investors may choose to abandon the exercise of warrants, while in secondary market trading of its ordinary shares to obtain excess returns.
Of course, bond investors is the cost of ultra-low interest rates in exchange for warrants, so the actual loss of investors in order to obtain warrants only to sacrifice that part of the bond interest. Therefore, the introduction of separate trading convertible bonds convertible bonds can make up for deficiencies in general, relatively low-risk investors is a high-yield investment products. With the increasing warming of the stock market, as well as the market is relatively hot warrants, convertible bonds, the inevitable separation of transaction bears a greater investment opportunities.
Separation of trading of convertible bonds investment strategy
Separation of investment in convertible bonds trading There are two main ways: First, investors can be adopted in the primary market under the net purchase (for institutional investors) and on-line purchase separate convertible bond transactions; Second, investors can pre - buy shares in the secondary market to obtain the corresponding distribution for the company debts, and on schedule for purchase.
Investors in the primary market on the purchase of new shares issued in the same manner and the separation transaction before applying to buy convertible bonds through designated media, such as Shang Zhengbao released to the public "release announcement", "Release Notes" in a clear separation of transactions recorded the issuance of convertible bonds means the issue price, distribution time and the purchase code and distribution elements. Investors access to this information after the issue price based on the required time to purchase, and their way of subscription of new shares and purchase basically the same. Generally speaking, separation of trading convertible bonds subscription price is 100 yuan / Zhang, each securities account the minimum purchase quantity of one hand, every hand will receive 10 separate trading convertible bonds, payment of the amount of 1,000 yuan, more than one hand to be is an integer multiple of the hand. Ceiling on the number of subscription for each account, the excess part of the purchase to be invalid. Each account can only purchase the securities once one has been notified can not be withdrawals,. The freezing of funds generally purchase time for four trading days.
For equity investors who buy shares before registration of the company's original shareholders, you can get placement in accordance with the ratio of 1:1. According to the company released a "Release Notice" recorded by placing the code in the release day subscription. The subscription of new shares subscription process and the same placing in the input code, the system has been automatically generated in accordance with the stock purchased by subscribed hand the number of shares to investors to provide subscription only.
Of course, the need to remind investors that in a separate transaction successfully subscribed to convertible bonds, due to the separation of trading warrants convertible bond transactions to be involved in the transaction before the opening of warrants trading, investors before the sale of warrants in the accounts at brokerage firms understanding of the relevant business rules and possible risks, and signed by the Stock Exchange revealed the risk of developing a unified book. Only after the signing of the book reveals the risks, investors warrants to conduct transactions. In addition, the subscription of convertible bonds are also separate transactions there are risks. Under normal circumstances, after the listing of convertible bonds will fall below the issue price of 100 yuan, investors rely on short-term gains are mainly trading of convertible bonds issued separate stock warrants. If the separation of trading after the listing of convertible bonds, convertible bonds and stock warrants a larger fall trend of a weak, investors still face the risk of losses. But even so, as long as the convertible bonds held by investors, maturity, you can still get back the principal and interest on bonds.
The issue of "separation of trading of convertible bonds" Company Case Study
Maanshan Iron and Steel shares (6.19,0.16,2.65%) (600,808 market, information, reviews, search) --- Company Board of Directors November 7, 2006 announcement: "the company issued this separate trading of convertible bonds has been the China Securities Supervision and Administration Committee for approval. company intends to issue separate transactions, 550,000 million of convertible corporate bonds, face value of 100 yuan / Zhang, circulation of 5.5 million in hand (5,500 million), the bond period of five years, the nominal default interest rate of 1.40% -2.00% range. The separation of trading convertible bonds issued by the expiration date of November 13, 2011, payment date for the expiration date November 13, 2011 after five days. Each Zhang Maanshan Iron and Steel shares trading convertible bonds in the final separation of subscribers can simultaneously access the issuer distributed 23 copies of warrants, the right line of the ratio of 1:1, that is, for every 1 cent a share warrants on behalf of A-share issuers the stock subscription rights, each warrant subscription price of 3.40 yuan / share. "
Maanshan Iron and Steel trading convertible bonds on the separation of the investment value of analysis, we can be three-pronged approach to carry out comprehensive consideration. Suppose an investor has 10 million yuan, you can subscribe for 100 numbers, separation of transactions Maanshan Iron and Steel shares convertible bonds, according to online sale of a success rate of 9.15448501% calculation, can be purchased at least 90 separate transactions Maanshan Iron and Steel convertible bonds, at the same time are available to the issuer to distribute copies of the 2070 warrants. And we assume that investors in separate transactions to sell convertible bonds listed on the same day on the operation, then under 06 Maanshan Iron and Steel debt (126,001 market, information, reviews, search) listed on the first day of the opening price 83 yuan selling, investors receive 7470 yuan gains at the same time in order to Maanshan Iron & Steel warrants (580.01 thousand quotes, information, reviews, search) listed on the first day of Open 1.133 yuan to sell, get 2345.31 yuan, and 9,000 after the cost of netting a profit, excluding charges expenditure to 815.31 yuan. Above assumptions, investors can actually be said to be separated Maanshan Iron and Steel Guaranteed convertible bonds at the end of trading gains. Claims from Maanshan Iron and Steel and Maanshan Iron & Steel warrants after the listing of performance, as of January 29, 2007, the two were up 3.2% and 140%. In addition, if the investors in the company's original shareholders, while also receive shares in the secondary market are being brought up the excess return on investment. Date of registration of a company stock November 10, 2006 closing price of 3.32 yuan for the benchmark, the company stock price up to 6.5 a month, investors are stocks stage a high yield of 95.78%.
Sinochem International (600.5 thousand quotes, information, reviews, Search) --- November 28, 2006 the company issued a public notice: "The board considered and adopted for determining the separation of this transaction priority placement of convertible bonds outstanding terms of the proportion of such motion, The issue of separation of trading convertible bonds for RMB 120,000 yuan, or 1,200 million bonds, each bond the same time, subscribers can get the company distributed 15 copies of warrants, that is, the number of warrants for the 18 , 000 million copies. The separation of trading of convertible bonds issued at par, each with face value of RMB 100 yuan, a total of 1,200 million bond issue, bond warrants attached to bonds, pro-rata distribution of subscribers. shareholders of record on for the November 30, 2006, the day after the close of the company's registered number of shares multiplied by 0.7 yuan (0.7 yuan per share face value of the bond placement), and then 1,000 yuan a hand into a few hands, this issue of separation of trading of convertible bonds interest rate inquiry interval -2.40% 1.80%. The issuance of warrants attached to each of the subscription price of 6.58 yuan, this issue of warrants attached to the right line of the ratio of 1: 1, that is, Each warrant issued on behalf of one of the A-share companies shares subscription rights. "
Similarly, we have three-pronged approach to a comprehensive analysis of its investment value: Suppose there are 10 million yuan investor, you can subscribe for 100 numbers, according to online sale of a success rate of 2.62725667% calculation, can be purchased at least 26 separate transactions Sinochem International convertible bonds, but also get distributed 390 copies of the issuer warrants. Suppose investors in the separation of trading convertible bonds listed on the conduct of day sell-off operations, in terms of debt in 2006 (126,002 market, information, reviews, search) opened at 82.5 yuan listed on the first day sell-off, investors receive income 2145 yuan, while in both of warrants (580,011 market, information, reviews, search) listed on the first day of Open 2.421 yuan to sell, get 944.19 yuan, with the cost of 2,600 yuan, compared to a profit, excluding charges expenses 489.19 to yield up to 18.81% . This is also the investors in the trading of convertible bonds of the international isolation of the insurance proceeds at the end. As of January 29, 2007, Sinochem warrants rose 106.98%. In addition, if the investors in the company's original shareholders, while also receive shares in the secondary market are being caused by rising investment income, date of registration of a company stock November 30, 2006 closing price of 6.5 yuan as the basis for calculating the company stock The highest price of 9.15 yuan for selling operations, investors are stocks stage yield 40.77%.
Key companies recommend that
Rizhao Port (600017 market, information, reviews, Search) --- January 24, 2007 Company Announcement: "no more than 880 million yuan to be issued separate trading convertible bonds, that is, not more than 8.8 million bonds, each bond at the same time The subscribers can get the company to distribute no more than 14 warrants, which warrants no more than 123.2 million the number of copies. The separation of trading of convertible bonds issued at par, each with face value of RMB 100 yuan, bonds, according to the attached warrants the proportion of bought the bonds were distributed free of charge to be paid for each convertible warrant exercisable at a price not lower than the company's stock in the Prospectus notice the first 20 trading days before the average price of 110% and the average price of a trading day, the specific exercisable at a price and determine the manner authorized by the Board general meeting of shareholders within the framework of the above in accordance with market conditions determined in consultation with the lead underwriters. "issued pursuant to separate transactions have been completed the company's successful experience in convertible bonds, I believe that the future of the unit should be very a good low-risk high-yield investment products. For the time being, the Company issued convertible bonds have not yet begun separate transactions implemented, we recommend investors to pay close attention to separation of the company trading on the issuance of convertible bonds related to a notice to intervene to grasp the opportunity to participate as shareholders in the original placement.
