Convertible bonds: Difference between revisions

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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.


Also known as Convertibles.
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 ==
== See also ==
* [[An introduction to equity capital]]
* [[Bond]]
* [[Bond]]
* [[CEPS]]
* [[CEPS]]
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* [[Conversion ratio]]
* [[Conversion ratio]]
* [[Conversion value]]
* [[Conversion value]]
* [[Exchangeable bond]]
* [[Option]]
* [[Ordinary shares]]
* [[Security]]
* [[Share]]
* [[Straight bond]]
* [[Yield to conversion]]
* [[Yield to conversion]]
===Other links===
[http://www.treasurers.org/node/5036 Convertible bonds, Will Spinney, ACT 2009]


[[Category:Corporate_finance]]
[[Category:Corporate_finance]]
[[Category:Long_term_funding]]
[[Category:Long_term_funding]]

Latest revision as of 15:32, 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.


See also