Convertible bonds

From ACT Wiki
Jump to navigationJump to search
The printable version is no longer supported and may have rendering errors. Please update your browser bookmarks and please use the default browser print function instead.

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.


See also