Is subordinated bonds 6 billion good, what is subordinated bonds

It's good news for brokers.

1. The issuance of subordinated debt is a financing method, indicating that the company has funds to use. And cash dividends are distributed every year. The business development of securities companies is limited by the scale of net capital, and the company needs to fully deduct the net capital for cash dividends.

After the cash payout, a number of the company's risk control indicators have approached the warning line. Net Capital Net assets.

of early warning indicators of 48%; Proprietary equity** and ** derivatives.

80% of the early warning indicator of net capital. Therefore, the issuance of subordinated bonds can replenish liquidity and reduce risk indicators.

2. The financing cost of subordinated debt is also relatively low.

Extended Information: I. Differences between Subordinated Debt and Subordinated Debt:

1. Different concepts: subordinated bonds refer to a form of debt in which the repayment order is better than the company's equity but lower than the company's general debt.

Subordinated debt refers to the long-term debt of a commercial bank issued by a bank with a fixed term of not less than 5 years (inclusive), unless the bank fails or liquidates and is not used to cover the bank's daily operating losses, and the claim of this debt is ranked after deposits and other liabilities.

2. The issuance method is different.

Bonds are also a type of debt, so subordinated debt includes subordinated bonds, but general subordinated debt refers to the approval of the relevant departments, and its "subordinated" status is protected and monitored by national laws, so subordinated bonds are the most standard subordinated bonds.

3. Different financing methods.

Subordinated bonds are preferred shares that are ranked in the order of repayment after deposits and senior bonds.

and bond varieties before common stock. As a bondholder, he can only receive the fixed interest and principal amount specified in the issuance conditions, that is, the holder of the subordinated bond cannot share in the excess return of the bank, but bears a greater risk of default.

Compared with the convertible bonds that listed banks like to issue in the early stage, the subordinated debt is equity financing.

The former is debt financing. Subordinated debt is not financed through the ** market, but from institutional investors to raise funds in a targeted manner, thereby replenishing the bank's capital.

The issuers of subordinated bonds are mainly major commercial banks in China, and the issuance funds are used to supplement the capital adequacy ratio.

The order of priority of claims is: general debt subordinated debt preferred stock common stock, the higher the priority of the claim, the lower the risk and the lower the expected return, and vice versa. Institutions often allocate assets according to a certain proportion according to the CAPM model based on their own circumstances to balance their own risks and returns.

In particular, Pan Da would like to point out that the "subordinated" in subordinated debt is a completely different concept from the "subordinated loan" in the five-level classification of bank loans (normal, concern, subordinated, doubtful, and loss). The "subordinated" in a subordinated bond only refers to the "subordinated" of its claim, and does not mean that its credit rating is necessarily "subordinated"; The "subordinated" in the five-level classification is classified as non-performing loans along with "doubtful" and "loss".

Subprime Loans Lenders first review the creditworthiness of the applicant before making a loan, and only applicants who meet the requirements will be able to get the loan. But many people with no credit history, or a poor credit history (such as a history of default or default), also have the need to borrow, and subprime mortgages are designed to meet this need. The so-called subordination refers to the interest rate of the loan, not to the subordinate, the meaning of the inferior, the inferior.

Subprime mortgages have higher interest rates than regular mortgages to compensate for the greater risk of default that lenders are exposing themselves to.