Since the beginning of this year, the issuance of convertible bonds by listed companies has been very hot, and the scale of funds raised has reached 101.688 billion yuan.Among them, the scale of convertible bonds issued by listed banks was 21 billion yuan, accounting for one-fifth of the total, making them the "big players" in convertible bond issuance.In addition, Xiamen Bank, Qilu Bank, Changshu Bank, and Ruifeng Bank also announced this year that they plan to issue convertible bonds.
Industry insiders pointed out that convertible bonds are one of the important tools for banks to replenish capital. In the context of widening credit and increasing the disposal of non-performing risk assets, some banks will continue to favor this "blood replenishment" method in the future.
Banks become "big players" in convertible bond issuance
Data show that in the first five months of this year, 49 companies issued convertible bonds.Among them, there are 7 companies with an issuance scale of more than 5 billion yuan, and listed banks occupy two seats.
Bank of Chongqing's convertible bonds issued by the Bank ranked first with a scale of 13 billion yuan, and Bank of Chengdu's convertible bonds issued with a scale of 8 billion yuan ranked third.The sum of the two is as high as 21 billion yuan, accounting for one-fifth of the total market convertible bond issuance during the year.
In addition to the above-mentioned two banks that have successfully issued convertible bonds, Xiamen Bank, Qilu Bank, Changshu Bank, and Ruifeng Bank also disclosed relevant announcements on convertible bond plans or issuance application feedback.
On May 11, Xiamen Bank issued the "Announcement on the Public Issuance of A-Share Convertible Corporate Bonds", with a proposed issuance amount of 5 billion yuan.Earlier, Ruifeng Rural Commercial Bank also issued an announcement that the bank plans to issue convertible bonds with a quota of 5 billion yuan.It can be expected that there will be a large wave of bank convertible bonds on the way.
Replenish core tier 1 capital
Convertible bonds are bonds in which the bondholders can convert the bonds into ordinary shares of the company at the agreed price at the time of issuance, which has both the attributes of stocks and bonds.If bondholders are optimistic about the appreciation potential of the bond issuing company's stock, they can convert the bond into stock at a predetermined conversion price.If they do not want to convert, bondholders can continue to hold the bond until the repayment period expires to collect the principal and interest, or sell it in the circulating market for cash.
Convertible bonds are one of the important tools for banks to replenish capital.For example, Xiamen Bank mentioned in the announcement of the issuance plan, "The funds raised by the Bank's issuance of convertible bonds this time will be used to support the development of various businesses of the Bank in the future after deducting the issuance expenses. After the share conversion, it will be used to supplement the Bank's core tier 1 capital in accordance with relevant regulatory requirements."
Analysts in the industry believe that, compared with other "blood replenishment" methods, the financing cost of convertible bonds is relatively low, the review process is relatively simple, and the time limit is more flexible; its income can be guaranteed at the bottom, and the issuer is obliged to repay the principal and pay according to the agreement. Interest is attractive to investors.Therefore, seeking "blood replenishment" by issuing convertible bonds is favored by many banks.
"Compared with other varieties, convertible bonds can take into account the demands of issuers and investors, and are a better match. For investors, the terms of convertible bonds of high-quality listed banks are relatively favorable, and once the conversion is completed, they can obtain Better returns belong to a scarce variety; for listed banks, they have a strong incentive to replenish capital and have a strong willingness to complete the conversion in a relatively short period of time.” said Guo Yixin, an analyst at Industrial Research.
The share conversion ratio needs to be increased
Although convertible bonds can be used to supplement core tier 1 capital, convertible bonds can only be fully included in core tier 1 capital after they are fully converted into shares.Its share conversion situation is related to the effect of "blood replenishment".
In the past period of time, the performance of bank stocks has been sluggish, and the stock prices of listed banks have "broken net" in a large area, which has led to the slow progress of convertible debt-to-equity conversion of listed banks.According to incomplete statistics, judging from the convertible bond-to-equity conversion situation disclosed by the listed banks at the end of the first quarter of this year, the convertible bond-to-equity conversion ratio issued by most of the listed banks is less than 0.1%.
At the same time, Zhangjiagang Bank, Suzhou Bank, Jiangyin Bank, and Jiangsu Bank lowered the price of convertible bonds.Taking the recently adjusted Bank of Jiangsu as an example, on the evening of May 19, Bank of Jiangsu announced that according to the 2021 profit distribution plan, the convertible bond conversion price will be adjusted from 6.37 yuan per share to 5.97 yuan per share.
Guohai Securities analyst Jin Yi pointed out that since the stock prices of many listed banks have been breaking net for a long time, and the issuance price of bank convertible bonds cannot be lower than the latest audited net assets per share, many bank convertible bonds cannot be triggered. Redemption terms to enable conversion.If the requirements for the subsequent issuance of bank convertible bonds are similar to the previous ones, the capital replenishment capacity of the convertible bonds will be limited.
Recently, with the gradual stabilization of the equity market, investors have begun to pay more attention to the convertible bond market, and the transaction scale has steadily increased.Some analysts predict that in view of the low price of bank convertible bonds and the valuation of underlying stocks, the strong protection of the debt bottom, and the limited space for future exploration, bank convertible bonds will still be an important choice for institutional bottom position allocation in the future. At the same time, 2022 The chance of a rebound in underlying stocks and the strong willingness of issuers to promote equity conversion also make some banks' convertible bonds have the opportunity to earn returns from underlying stocks.
However, the China Securities Research Report pointed out that after the rebound after May, the valuation of convertible bonds has reached a historically high level.In the financial sector, banks, as the sector with the largest weight of convertible bonds, are more suitable for the allocation of pure bonds under the current market environment.
(Editor in charge: Guan Jing)
