April 27, 2024
Stocks & Bonds
Bond-to-equity conversions soar
[THE INVESTOR] Korean investors’ conversion of equity-linked bonds into shares have surged, data showed on June 23.
Investors converted 187 billion won (US$164 million) worth of convertible bonds, exchangeable bonds and bonds with warrants into stocks between April 1 and June 22, up 31 percent from the same period a year earlier, according to the data from the Korea Securities Depository.
The number of conversions totaled 496 cases, approximately 25 percent more than a year ago.
CBs, which give holders the right to convert them into common shares after a given period, took the lion’s share of the total with 170.5 billion won, up 27 percent from a year earlier.
The amount of converted EBs soared 239 percent to 12.9 billion won, while that of BWs plunged 20 percent to 3.6 billion won.
BWs offer holders a chance to buy shares in the issuing company at a guaranteed price, and EBs give the holder the option to exchange them for shares of a subsidiary or other company at some future date and under prescribed conditions.
Holders of such equity-linked bonds can benefit from share price rises as they are usually entitled to buy them at below-market prices.
By Alex Lee and newswires (alexlee@heraldcorp.com)
Investors converted 187 billion won (US$164 million) worth of convertible bonds, exchangeable bonds and bonds with warrants into stocks between April 1 and June 22, up 31 percent from the same period a year earlier, according to the data from the Korea Securities Depository.
The number of conversions totaled 496 cases, approximately 25 percent more than a year ago.
CBs, which give holders the right to convert them into common shares after a given period, took the lion’s share of the total with 170.5 billion won, up 27 percent from a year earlier.
The amount of converted EBs soared 239 percent to 12.9 billion won, while that of BWs plunged 20 percent to 3.6 billion won.
BWs offer holders a chance to buy shares in the issuing company at a guaranteed price, and EBs give the holder the option to exchange them for shares of a subsidiary or other company at some future date and under prescribed conditions.
Holders of such equity-linked bonds can benefit from share price rises as they are usually entitled to buy them at below-market prices.
By Alex Lee and newswires (alexlee@heraldcorp.com)
