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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 MatchesConvertibleConvertibleConvertibles 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. Mandatory convertiblesMandatory convertiblesA debt instrument that is exchangeable at some point for equity in the form of common stock or a new issue. 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. Zero coupon convertible securityZero 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. Cash plus convertibleCash plus convertibleConvertible bond that requires cash payment upon conversion. Further SuggestionsConvertible securityconvertible term insurance Convertible bond Convertible Arbitrage Convertible eurobond convertible bond Convertible preferred stock Convertible price Convertible 100 |
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