The Zijin Convertible Bond issued by Zijin Bank will expire on July 22. As of July 15, the unconverted ratio reached as high as 99.99%. The bond was issued in 2020 with a scale of 4.5 billion yuan, and Zijin Bank will most likely face a rigid redemption at maturity. The Qingnong Convertible Bond from Qingdao Rural Commercial Bank will also expire on August 25. Currently, the six outstanding bank convertible bonds in the market are showing divergent performance. For the Shangyin Convertible Bond and Changyin Convertible Bond, the underlying stock prices are already above the conversion prices, with low conversion premiums, indicating strong conversion momentum. For the Chongyin Convertible Bond, the underlying stock price is slightly above the conversion price, but the conversion premium is 12.30%, limiting the momentum for large-scale conversion. For the Xingye Convertible Bond, Zijin Convertible Bond, and Qingnong Convertible Bond, the underlying stock prices are all below the conversion prices, suggesting weak conversion willingness. Dong Ximiao, chief researcher at Zhaolian, stated that a low conversion rate indicates the convertible bonds have a limited role in supplementing core tier-one capital. Banks could consider revising conversion prices and broadening capital replenishment channels.
Jiangsu Zijin Rural Commercial Bank Co LtdZijin Convertible Bond has 99.99% unconverted ratio and will expire on July 22, forcing rigid redemption of 4.5 billion yuan, which is negative for the bank's capital position.
Qingdao Rural Commercial Bank Corp Class AQingnong Convertible Bond from Qingdao Rural Commercial Bank will expire on August 25, and its underlying stock price is below conversion price, indicating weak conversion willingness and potential redemption pressure.