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High premium convertible debenture |
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High premium convertible debentureA bond with a long-term, high-premium, common stock conversion feature. It also offers a competitive interest rate. This type of investment vehicle is aimed at bond investors who want to be able to convert into stock to hedge against inflation.High premium convertible debenture Similar MatchesMandatory convertiblesMandatory convertiblesA debt instrument that is exchangeable at some point for equity in the form of common stock or a new issue. Convertible securityConvertible securityA security that can be converted into common stock at the option of the securityholder; includes convertible bonds and 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. Convertible bondConvertible bondGeneral debt obligation of a corporation that can be exchanged for a set number of common shares of the issuing corporation at a prestated conversion price. 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 SuggestionsConvertible 100Convertible price convertible term insurance Convertible currency convertible bond Cash plus convertible Zero coupon convertible security Convertible Arbitrage Convertible eurobond |
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