Convertible Bonds Yield Payoffs
Foreign investors enjoyed a combined profit of 84.3 billion won ($64.5 million) by converting into stocks bonds issued overseas by Korean companies listed on the Korea Stock Exchange or the Kosdaq market, the Korea Securities Depository said Friday.According to the agency, overseas investors switched convertible bonds into 60.5 million shares, worth 270.7 billion won, in 41 local corporations and exercised their right on bonds with certainty to buy 19.5 million shares, worth 140.3 billion won, in 16 firms.
Convertible bonds can be exchanged, at the option of the holder, for a specific number of shares of a company. Investors in bonds with certainty are entitled to buy a specific amount of stocks of the issuer at a specific price.
Through the deals, foreign investors saw a profit of 49.3 billion won from equity conversions and 35 billion won from exercising warrants, the depository said.
Foreign investors enjoyed a return rate of 20 percent from their investment in convertible bonds and 28 percent from bonds with certainty, it noted.
by Lee Chul-ho
with the Korea JoongAng Daily
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