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15-04-2014, 07:32 PM
Thought it might be interesting for discussion.
Recently, i came across announcement from this business which i brought for couple of yrs ago.
It been issuing CBs for a while.
"announced the proposed issue of $1.9 billion 4.5% five-year term convertible bonds. Based on the initial conversion price of HK$1.407 per share (representing a premium of around 34% to yesterday's closing price of $1.05) and assuming full issuance and full conversion of the bonds at the initial conversion price, the bonds will be convertible into 1.35 billion new shares, representing approximately 13.07% of the enlarged issued share capital of the company."
usually when i see company issuing CBs, i will sell it soon.
I read somewhere that Convertible bonds will eventually be converted to shares sooner or later, thereby diluting the existing shareholders' equity.
I recalled Dr Michael Leong whom wrote "Your First $1,000,000 Making It In Stocks." said something about institutional CB holders whom convert their bonds to shares will usually sells the shares off hence driving the share prices lower.
Maybe it will be beneficial for those subscribing the CBs but usually CBs subscription is for institutional funds and out of reach for small-time investor, such is the case for the above company.
Whats' your views regarding Convertible bonds?
Recently, i came across announcement from this business which i brought for couple of yrs ago.
It been issuing CBs for a while.
"announced the proposed issue of $1.9 billion 4.5% five-year term convertible bonds. Based on the initial conversion price of HK$1.407 per share (representing a premium of around 34% to yesterday's closing price of $1.05) and assuming full issuance and full conversion of the bonds at the initial conversion price, the bonds will be convertible into 1.35 billion new shares, representing approximately 13.07% of the enlarged issued share capital of the company."
usually when i see company issuing CBs, i will sell it soon.
I read somewhere that Convertible bonds will eventually be converted to shares sooner or later, thereby diluting the existing shareholders' equity.
I recalled Dr Michael Leong whom wrote "Your First $1,000,000 Making It In Stocks." said something about institutional CB holders whom convert their bonds to shares will usually sells the shares off hence driving the share prices lower.
Maybe it will be beneficial for those subscribing the CBs but usually CBs subscription is for institutional funds and out of reach for small-time investor, such is the case for the above company.
Whats' your views regarding Convertible bonds?