In the first quarter of this year, for the first time in Chinese capital markets, more cash was raised by convertible bonds CBs than from initial public offerings Rmb5.6 billion $602 million, compared to Rmb5 billion. Last year, there was just Rmb4 billion issued for the whole 12 months.
What has changed this year, and attracted investor interest, are highly advantageous terms, such as the resetting clauses and low conversion premiums. The CBs coming out this year provide big benefits for the investor - but less so for minority shareholders holding the publicly traded shares, says one Shanghai Stock Exchange researcher.
Take China's largest CB offering to date. In February,...
