Stock-Related Bond Exercise Amount Drops 75% in Q1 This Year

The scale of exercising rights related to stock-linked bonds in the first quarter of this year sharply declined by more than 75% compared to the previous quarter.

According to the Korea Securities Depository on the 14th, the number of exercised rights for stock-linked bonds in the first quarter of this year was 623 cases, a 5.8% increase compared to the previous quarter (589 cases), but the exercised amount was 405.9 billion KRW, a 75.9% decrease compared to the previous quarter (1.6833 trillion KRW).

Provided by Korea Securities Depository

Stock-linked bonds refer to bonds such as Convertible Bonds (CB), Exchangeable Bonds (EB), and Bonds with Warrants (BW) that can be converted or exchanged into the issuer's shares or shares of another company guaranteed by the issuer under predetermined conditions (exercise price, exercise period, etc.) at issuance. From an investor's perspective, if the target stock price falls, holding the bond provides stable interest income, and if the stock price rises, exercising the rights (conversion, exchange, warrant exercise) allows for realizing capital gains.

By type, the number of exercised rights for CB was 432 cases, a 26.3% increase compared to the previous quarter (342 cases). In contrast, EB was 16 cases, an 11.1% decrease compared to the previous quarter (18 cases), and BW was 175 cases, a 23.6% decrease compared to the previous quarter (229 cases).

Regarding the exercised amounts by type, CB recorded the largest decline, sharply dropping by 81.8% to 201.4 billion KRW compared to the previous quarter (1.1048 trillion KRW). EB decreased by 65.6% to 190.5 billion KRW compared to the previous quarter (553.1 billion KRW), and BW decreased by 45.3% to 13.9 billion KRW compared to the previous quarter (25.5 billion KRW).