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Convertible security |
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Convertible securityA security that can be converted into common stock at the option of the securityholder; includes convertible bonds and convertible preferred stock.Convertible security Similar MatchesCash plus convertibleCash plus convertibleConvertible bond that requires cash payment upon conversion. Convertible priceConvertible priceThe contractually specified price per share at which a convertible security can be converted into shares of common stock. Convertible currencyConvertible currencyA currency that can legally be exchanged for another or for gold. In times of crisis, governments sometimes restrict such exchange, giving rise to black market exchange rates. ConvertibleConvertibleConvertibles are bonds issued by companies which can be converted into ordinary shares or preference shares at a given price at a future date. For example a convertible might pay 6% in income, and give the holder the right to 5 ordinary shares for every £20 of bond value.They are a popular means of raising capital when interest rates are high, because the interest which the company has to pay on them is lower than on an unconvertible bond (the option to convert is deemed to be worth something to the holder).From an investor's point of view, convertible bonds can be attractive if the company's stock is volatile because they provide some of the security of a bond whilst at the same time allowing the investor to convert to shares if the company's stock rises. Convertible preferred stockConvertible preferred stockPreferred stock that can be converted into common stock at the option of the holder. See also: participating convertible preferred stock. Further SuggestionsHigh premium convertible debentureconvertible term insurance Mandatory convertibles convertible bond Convertible eurobond Convertible 100 Convertible Arbitrage Convertible bond Zero coupon convertible security |
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