Core Viewpoint - The rapid redemption of bank convertible bonds is driven by the strong performance of underlying bank stocks, leading to a decrease in the number of outstanding convertible bonds in the market [1][2][4]. Group 1: Bank Convertible Bonds Redemption - Hangzhou Bank announced the early redemption of "Hangyin Convertible Bonds" due to triggering conditional redemption clauses, marking it as the third bank convertible bond to undergo forced redemption this year [2][3]. - As of May 26, 2025, Hangzhou Bank's stock price had closed above 130% of the bond's conversion price for 15 trading days, triggering the redemption [2][3]. - The number of outstanding bank convertible bonds is expected to decrease from 10 to 7 by the end of the year, with several bonds nearing redemption conditions [4]. Group 2: Market Dynamics and Trends - The strong performance of the banking sector, supported by high dividends and market risk aversion, has led to a rise in the China Securities Bank Index by over 7% this year [2][4]. - The scarcity of large convertible bonds is expected to increase due to the accelerated redemption process and the lack of new issuances in 2023 [4][5]. - Institutional reports indicate that the supply-demand imbalance for large convertible bonds will become more pronounced, with the total outstanding amount potentially decreasing from 170 billion to around 100 billion [4][5]. Group 3: Conversion Rates and Capital Supplementation - Historically, the conversion rates of bank convertible bonds have been low due to factors such as depressed stock prices and high conversion premiums [5][6]. - However, with rising stock prices, conversion rates are expected to improve, as evidenced by previous forced redemptions where conversion rates exceeded 99% [6]. - As of May 28, the unconverted balance of Hangyin Convertible Bonds has decreased significantly, indicating a trend towards higher conversion rates [6].