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Zero coupon convertible security |
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Zero coupon convertible securityA zero-coupon bond convertible into the common stock of the issuing company after the stock reaches a certain price, using a put option inherent in the security. Also refers to zero-coupon bonds, which are convertible into an interest bearing bond at a certain time before maturity.Zero coupon convertible security Similar MatchesConvertible 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. Convertible bondConvertible bondA bond that can be converted into shares of the issuing company or its parent. Convertible term insuranceConvertible term insuranceTerm life insurance which can be converted into cash value insurance. In the UK the equivalent (convertible term assurance) is conversion of term assurance into endowment assurance. 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. 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. Further SuggestionsMandatory convertiblesHigh premium convertible debenture Convertible eurobond Convertible Arbitrage Convertible security Convertible 100 Convertible bond Convertible price Cash plus convertible |
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