Pudong Development Bank's convertible bonds (PDB CB) will be delisted from the Shanghai Stock Exchange on October 28, marking the end of their conversion period on October 27.

As the largest convertible bond by issuance size to exit the market this year, PDB CB's delisting will reduce the number of bank-issued convertible bonds in circulation to just six, shrinking the market balance by at least 90 billion yuan compared to the beginning of the year.

Notably, as of October 27's market close, the unconverted portion of PDB CB stood at just 0.33%, with the conversion rate reaching 99.67% - significantly exceeding market expectations. In recent months, major investors including CHINA MOBILE, China Cinda Asset Management, and China Orient Asset Management have increased their stakes in Pudong Development Bank through CB conversions.

Analysts note that bank-issued convertible bonds represent a low-cost financing method, with conversions directly boosting core tier-1 capital. The high conversion rate of PDB CB will substantially improve Pudong Development Bank's capital adequacy ratio, providing stronger support for business expansion and risk resilience.

**99.67% Conversion Rate Achieved** Originally issued in November 2019 with a 500 billion yuan offering - then the largest CB issuance on record - PDB CB faced conversion challenges due to prolonged weakness in the underlying stock price. As of March this year, 99.9971% remained unconverted, with 245.72 billion yuan (49.14% of total issuance) still outstanding as of September 30.

The turnaround came through strategic capital injections. Starting June, investors led by CHINA MOBILE, China Cinda, and China Orient initiated large-scale conversions. On June 27 alone, China Cinda's investment arm converted bonds worth 9.12 billion shares, slashing the unconverted balance to 382.11 billion yuan (76.42%).

CHINA MOBILE further boosted its stake to 18.18% through a 450 million share conversion on October 13, stating the move would strengthen the bank's capital base and enhance risk management capabilities.

By October 27, PDB CB closed at 110.800 yuan with a 6.87% conversion premium. The bank's latest capital adequacy ratios stand at 8.91% (core tier-1), 10.38% (tier-1), and 13.55% (total).

**Bank CB Market Shrinks to Six** With PDB CB's exit, only six bank-issued convertible bonds remain - down from 13 at year-start, representing over 90 billion yuan in market contraction. No new bank CBs have been issued since 2023.

This year has seen six bank CBs exit: five through early redemption triggers (including Chengdu Bank, Suzhou Bank, and Bank of Hangzhou CBs) and CITIC Bank's maturity redemption. Historical data shows conversion rates for these instruments consistently exceeded 99%.

Experts emphasize that early redemptions effectively strengthen bank capital by forcing conversions, while avoiding the liquidity pressures of maturity repayments. Similar last-minute conversion rescues occurred previously with China Everbright Bank's CB in March 2023, when China Huarong (now CITIC Financial Asset) converted 1.4 billion bonds to become a major shareholder.