Issuance of convertible bonds A cha

Issuance of convertible bonds A characteristic of convertible bonds compared to general bonds is that creditors can convert to the company's equity capital within a certain period of time based on certain conditions with the characteristics of stock call options. is. The advantage is that, firstly, the amount of funds raised is large and, secondly, the cost of raising funds is relatively low. Under normal circumstances, the interest rate on convertible bonds is usuallyonly 1% -2%. Let's take Vanke, a large-scale real estate development company like this, as an example. The first issuance of Vanke convertible bonds raised a total of 1,472 million yuan. The total interest on the first 1.5 billion yuan convertible bond was less than the interest of the bank. The same amount of loan50,000 yuan. It's also much more convenient than negotiating a loan with multiple banks, as the donated funds are transferred to your account at once. More importantly, due to the nature of convertible bonds, there is no need to repay principal and interest as with ordinary debt, and debt can be converted to equity capital based on the agreed time and conditions. It means that you can reduce your repayments. , DJ Real Estate Group can raise funds through the issuance of convertible bonds.After the issuance of convertible bonds, the company's debt ratio will increase and financial pressure will increase. When a company lacks profitability, investors demand repayment from publishers without exercising their right to exchange shares.It is recommended that the purpose and significance of the issuance of convertible bonds be lost and that the scale of convertible bond issuance of the DJ Real Estate Group be controlled.