Convertible bonds: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Add links.) |
imported>Doug Williamson (Expand definition.) |
||
| Line 1: | Line 1: | ||
Bonds which have the right but not the obligation to convert into a specified number of ordinary shares (or other securities) under specified terms and conditions. | Bonds which have the right but not the obligation to convert into a specified number of ordinary shares (or other securities) under specified terms and conditions. | ||
This right is an option in favour of the holder / investor. | |||
In return for this additional valuable right, the investor is generally willing to accept a lower rate of interest on the debt. | |||
This saves interest for the issuer / borrower, at the cost of writing the option. | |||
Convertible bonds are also known as ''Convertibles''. | |||
| Line 13: | Line 20: | ||
* [[Conversion value]] | * [[Conversion value]] | ||
* [[Exchangeable bond]] | * [[Exchangeable bond]] | ||
* [[Option]] | |||
* [[Ordinary shares]] | * [[Ordinary shares]] | ||
* [[Security]] | * [[Security]] | ||
* [[Share]] | * [[Share]] | ||
* [[Straight bond]] | |||
* [[Yield to conversion]] | * [[Yield to conversion]] | ||
[[Category:Corporate_finance]] | [[Category:Corporate_finance]] | ||
[[Category:Long_term_funding]] | [[Category:Long_term_funding]] | ||
Revision as of 15:16, 16 November 2022
Bonds which have the right but not the obligation to convert into a specified number of ordinary shares (or other securities) under specified terms and conditions.
This right is an option in favour of the holder / investor.
In return for this additional valuable right, the investor is generally willing to accept a lower rate of interest on the debt.
This saves interest for the issuer / borrower, at the cost of writing the option.
Convertible bonds are also known as Convertibles.
