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Sun loyalists

The era in which debt-returning markets can be stabilized is over.

On 13 May, the fifth risk alert issued by ST search and adhesion stated that there was a risk that company stocks and convertible company bonds could be terminated by deep-seated stock exchanges. On 6 May, the ST blue guilder (Poverty) announcement stated that the deep-rooted decision was to terminate the company’s equity and convertible company bonds on the market.

The “two-low” tactics that prevailed in the previous market are now facing the challenge of market withdrawal and default. A number of investors are withdrawing from lower-qualified debt-revolving varieties. Data statistics show that in May, a total of 18 convertible debt fell by more than 10 per cent, with special swap debt falling by 55 per cent.

Market sources have indicated that, as a result of the overall registration system, stock A retreats, or will become a regular feature, can be converted into a divine or end of the debt, which imposes higher requirements for convertible investment. Investors need not only to learn to choose quality varieties, but also to avoid default and market risk.

Linked reaction from the collapse in search and transit debt

“Comprehensible markets as a whole have not been adequately anticipated for rebates. The accelerated withdrawal of special-debted debts has left much of the money unfunded.” One convertible researcher indicated.

In the near future, the special-debt-debt announcement is about to launch a direct-market model that will allow markets to start re-examining this risk.

On 13 May, the fifth risk alert issued by ST search agents stated that there was a risk that corporate shares and convertible debt could be terminated by deep-delivery. It was mentioned that corporate shares ceased to be marketed for dealing with mandatory market withdrawals in the trading category, and that company shares and companies could convert company bonds from re-entry periods.

On 5 May, as a result of the termination of the planned change of control, ST search agents were suspended for six consecutive periods and triggered the market-based criteria for the transaction.

As at 12 May 2023, the company’s stock receipts were 0.56 yuan renminbi/equity, and 14 transactions were less than 1 yuan renminbi per year. Even if the next six transactional days ST search-and-rescue will be completely suspended, it will not be possible to re-equilibrate the above values, and the city of return has been established.

It is worth noting that there is no re-marketing period in the trading category. Under the rules on the marketing of stock on deep-secured stock exchanges, corporate shares are closed to market because they touch upon mandatory market withdrawals in the trading category, and corporate shares and company bonds are not subject to rescheduling.

As a result, the search-and-de-debt price was quickly reversed. At the beginning of last week, the search-and-debt price remained at 60 yuan renminbi, but last week, with the risk of growing up-to-back markets, the variety fell to 31.66 yuan renminbi.

A convertible researcher indicated that, due to the non-return period, the search and transfer of special debts would trigger the return of the city before the brown swap (overright).

The rapid weakness of the search for special-return debt has led to a “speak-out” market for convertible markets that have not yet come back from the market. Some of the company’s basic branding of debt-revolving varieties are being sold.

As a result of the pre-audit audit report issued by the audit body, the idea of converting debt has also been sold in the near future, more than 11.4 per cent last week.

For example, because of audit reports issued by the audit body that could not be commented upon, the company’s stock transactions are dealt with in a special manner with a “market risk alert”. In the near future, there has also been a significant setback in red-debt, from $117 to $89.024.

Post-market or general claims

How can the rebirth of the market be affected?

The Chinese Securities Analyst considered the credit risk to be one of the key factors affecting the transfer of debt in the short term, in the light of the performance of the convertible market that had previously been disturbed by credit events, and that the pessimism of the subject matter or the concentration of release.

In his view, the short-term liquidity of the shock market would lead to an increase in the sale of low-rated, small-scale, poorly performing re-evaluated assets; and, secondly, debt-oriented, balanced varieties or falling into the battery, the preferential treatment of debt at that stage. Thirdly, less qualified, less protective debt is difficult to reduce.

Rather, it is the way in which the market is truly strained by the rescheduling of debt once it has been withdrawn. In particular, most of the recently released market distributors are not in debt, and it is expected that the insolvency reorganization will be the final solution.

One participant indicated that, as of now, there had been no cases of rebirth in the market. In general, when a listed company retreats, it is more likely that it will be difficult for the company to repay the due bond interest. If insolvency re-engineering is initiated, the transferable debt issued by the company will be classified as an ordinary claim, and the order of settlement is limited to equity. Moreover, in practice, bonds are not just paid.

Under the enterprise insolvency law, ordinary insolvency claims are settled sequentially and the insolvency estate is not sufficient to satisfy the same order of satisfaction and are distributed proportionately. At present, the issue of undebtedness exists in ST search, ST blue guilders, the State of the Commonwealth.

The former announcement by ST states that, if the Court decides to entertain a creditor’s application for reorganization of a company, and in accordance with article 46 of the Business Law of the People’s Republic of China, there is uncertainty as to the settlement of the claims in the reorganization proceedings of the company for which no transferee of interest is selected.

Sunday stated that, under the definition of convertible debt and in the light of the treatment of some of the company’s notices, convertible debt was generally defined as the type of ordinary bonds without security of property, and that the order of settlement was in the end of the claim. That is to say, if the main unit of the transfer is forced to return to the city, the remaining transferable debt will be finally settled and the risk of default is greater.

The era of “winning” has passed

As the prices of convertible debt are not captive and subsisted, the “two-low” strategy has gone on over the years.

The “low two” convertible debt refers to convertible debt with low-to-return prices and low-to-return premiums. Investments such as debt-revolving strategies have been almost “win-win” in the past three years.

Generally, lower debt prices make convertible debt more debt- and defensive; low premiums allow for greater equity and offensiveness of convertible debt. A number of investors have lowered the two-low-alternity debt to a higher ranking, choosing a “sing-net” ranking of the former.

Recent risk events, however, are gradually fermenting in favour of “two lows”.