Redemption Risk of Convertible Bonds
First written in FY2021. 1 of 2 entries say "Mitigated", first in FY2023-Q2. Latest entry: FY2023-Q2.
1 other company's latest entry also says "Mitigated".
- FY2023-Q2MitigatedAnnual report
「Based on a resolution adopted at a meeting of the Board of Directors held on 5 April 2023, the company purchased and cancelled on 21 April 2023 the entire outstanding balance of the First Series Unsecured Convertible Bonds with Stock Acquisition Rights (subject to a limited pari passu clause among convertible bonds with stock acquisition rights) issued on 4 August 2021.」
The company states that it purchased and cancelled ahead of maturity the entire outstanding balance of the bonds with stock acquisition rights, which carried the possibility of lump-sum redemption at maturity and refinancing. - FY2021First statedAnnual report
「The company issued bonds with stock acquisition rights with an aggregate face value of ¥2,000 million on 4 August 2021. If the bonds are not converted into shares because, among other factors, the company’s share price remains below the conversion price, the outstanding bonds with stock acquisition rights would have to be redeemed in a lump sum at face value at maturity on 4 August 2026. This may require the company to refinance through fundraising, including other methods.」
The company has identified as a new risk the possibility of a lump-sum redemption in August 2026 and refinancing if the ¥2 billion in bonds with stock acquisition rights issued to fund M&A is not converted into shares.