ConvertibleBond

  In financial terms, a convertible bond , also called convertible note or convertible bond, is a kind of bond that the holder may convert into an agreed amount of shares of stock in the issuer or funds of equal values. It's a hybrid financial product with equity and debt-like characteristics. A bond is usually bought from a company which has growing assets and funds in its treasury. This is done so as to meet with the needs of the financial issuer by borrowing money at a lower rate of interest, by buying back its own shares from the issuer or by selling its bonds. The conversion of the bond may take place during the maturity period or as part of the distribution of dividends. Under the traditional concept of these instruments, bondholders are lenders. But convertible bondholders are not only lenders. Bondholders do not have to pledge their assets as collateral, unlike homeowners or home owners. Instead, they have an option to convert the bond into cash. So when the value of the bo...

  In finance, a convertible bond , or convertible bond note is an instrument that the issuer can convert into either a specified amount of stock in the underlying company or cash equal to the value of the underlying debt. It's a hybrid financial product with equity-and-debt-like characteristics. It is often seen as a vehicle for leveraged debt. It's not uncommon for convertible bond issues to have additional features. For example, convertible bond issues may allow the holders to convert their interest into common stock. This conversion could be done for one of several reasons. One reason may be to free up resources for new expansion plans (such as buying more manufacturing facilities or expanding into certain geographic areas). Another reason may be to move the company closer to financial freedom. By selling more stock, the ability to raise additional funds is increased. Typically, a convertible bond issue will convert one or more of the principal debt obligations into senior u...