Credit Risk

Bonds are instruments that pay interest periodically (in the case of interest-bearing bonds) and are repaid at face value when they become due for redemption. However, in the unlikely event that the issuer of the bond goes bankrupt before the due date and is unable to pay the money, the bondholder will not be able to receive interest payments or repayment of the face value of the bond. This possibility is called "credit risk”. To some extent, the level of credit risk (i.e., the likelihood that the issuer will be unable to make interest payments or repay the face value of the bond) can be determined by looking at the rating determined by a credit rating agency.

Price Fluctuation Risk

For CBs, as with stocks, the price is determined by supply and demand in the market, so the price at the time of sale may be higher or lower than at the time of purchase. Therefore, if you sell your shares at a price lower than the purchase price, you will incur a loss.
In particular, it is important to note that with CBs, the impact of the price of the shares (stock price) issued by the issuer of the CBs may be significant.
In addition, it may be affected by various factors such as the time to redemption and interest rate trends.

Liquidity Risk

As more CBs are converted into shares, the remaining amount of CBs may decrease, making them less liquid.