People looking for a flexible way to invest in a company should consider convertible bonds. Like traditional corporate bonds, convertible bonds are a relatively low-risk kind of i… more »
Convertible bonds, like most investments, carry a risk of loss. A convertible bond is a bond that the holder can convert to a share of a company's equity at certain periods du… more »
A convertible bond is issued as hybrid security. This means that for the holder, convertible bonds are similar to equity or debt holdings. more »
A bond that can be converted into a predetermined amount of the company's equity at certain times during its life, usually at the discretion of the bondholder. more »
In finance, a convertible bond or convertible note (or a convertible debenture if it has a maturity of greater than 10 years) is a type of bond that the holder can ... more »
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Nov 26, 2013 ... Convertibles have performed nearly as well as stocks, and far better than traditional bonds, this year. more »
Nov 27, 2013 ... Edward Silverstein's convertible fund has beaten both stocks and bonds. How did he do that? more »
Nov 21, 2013 ... Sales of convertible bonds are booming, as investors seeking to benefit from the roaring U.S. stock rally rush to purchase debt that can convert ... more »
Convertible bonds are bonds that are issued by corporations and that can be converted to shares of the issuing company's stock at the bondholder's discretion. more »
Aug 12, 2013 ... From Yahoo Finance: Ever wondered what exactly a convertible bond does? Read the features of a convertible bond and learn how important ... more »
Convertible bonds are corporate debt instruments that allow the investor to trade in the debt for an equity position. Corporations can raise money for operations by issuing equity or debt. Making shares of stock available for purchase by investors is equity financing, since the investor gives the corporation money in exchange for a percentage of ownership in the company. When a corporation uses debt to finance operations, it issues bonds. Bonds are loan notes that pay the investor periodic interest and repay the principal of the loan at maturity.
Ordinarily, stocks and bonds are two totally different types of corporate securities. Convertible bonds bridge the divide between the two instruments. The holder of convertible bonds can trade them in for stock. Basically, convertible bonds are an option to convert a loan to the corporation that must be repaid into an equity position that does not have to be repaid.
A corporation will typically issue convertible bonds to protect its public image. When a corporation issues additional stock to raise money, it sometimes has a detrimental impact on the corporation's stock price. Issuing convertible bonds that can be quietly traded in for stock at a later date avoids this potential impact. Read more about convertible bonds from the links on this Business.com page.