The "debt" in debt-to-equity swap refers to convertible bonds, the full name of which is convertible corporate bonds, or convertible bonds for short. Debt-to-equity swap means that bondholders can convert convertible bonds into ordinary company shares at a specific time and under specific conditions. Convertible bonds have the characteristics of both bonds and stocks, including three characteristics:

1. Credit: Convertible bonds have a specified interest rate and term, and bondholders can choose to hold the bonds at maturity and collect the principal and interest.

2. Equity: After the convertible bonds are converted into shares, the original bondholders become shareholders of the company and can participate in the business decision-making and dividend distribution of the enterprise.

3. Convertibility: bondholders can convert bonds into stocks according to the conditions agreed at the time of issuance, which is an important symbol of convertible bonds. Of course, bondholders can also choose not to convert into shares, but to collect principal and interest at maturity or sell them in the circulation market.

Since the interest rate of convertible bonds is usually lower than that of ordinary corporate bonds, issuing convertible bonds is conducive to raising capital at low cost, developing corporate business and solving corporate debt problems. However, convertible bonds are actually an increase in cash for enterprises and an increase in the company's share capital. For the original shareholders, the number of people participating in corporate dividends increases, and the dividends available in the future decrease, which is unfavorable to the original shareholders.

Specific to the A-share market, because bondholders rarely choose to collect principal and interest at maturity, they usually choose to sell and cash out in the market; Moreover, due to the T+0 and infinite fluctuation of convertible bonds, speculation is often encountered in the market, so debt-to-equity swaps have no obvious negative or positive impact on bondholders, mainly depending on whether bondholders think that this company has great development space in the future, whether the company has a high-quality management team, whether it takes a fancy to the company's beautiful vision, and whether it chooses to develop together with the company or make short-term profits!

If bondholders choose debt-to-equity swaps, grow together with enterprises and share the development dividend of enterprises, they must choose enterprises with good overall operating data, good internal development momentum and potential. Only when they encounter temporary capital turnover difficulties can they get good returns in the future.