Definitions for convertible bond
con·vert·ible bond

Princeton's WordNetRate this definition:0.0 / 0 votes

1. convertible bondnoun

   a bond that can be converted to other securities under certain conditions

WikipediaRate this definition:0.0 / 0 votes

1. Convertible bond

   In finance, a convertible bond or convertible note or convertible debt (or a convertible debenture if it has a maturity of greater than 10 years) is a type of bond that the holder can convert into a specified number of shares of common stock in the issuing company or cash of equal value. It is a hybrid security with debt- and equity-like features. It originated in the mid-19th century, and was used by early speculators such as Jacob Little and Daniel Drew to counter market cornering.Convertible bonds are most often issued by companies with a low credit rating and high growth potential. Convertible bonds are also considered debt security because the companies agree to give fixed or floating interest rate as they do in common bonds for the funds of investor. To compensate for having additional value through the option to convert the bond to stock, a convertible bond typically has a coupon rate lower than that of similar, non-convertible debt. The investor receives the potential upside of conversion into equity while protecting downside with cash flow from the coupon payments and the return of principal upon maturity. These properties—and the fact that convertible bonds trade often below fair value—lead naturally to the idea of convertible arbitrage, where a long position in the convertible bond is balanced by a short position in the underlying equity. From the issuer's perspective, the key benefit of raising money by selling convertible bonds is a reduced cash interest payment. The advantage for companies of issuing convertible bonds is that, if the bonds are converted to stocks, companies' debt vanishes. However, in exchange for the benefit of reduced interest payments, the value of shareholder's equity is reduced due to the stock dilution expected when bondholders convert their bonds into new shares. Convertible notes are also a frequent vehicle for seed investing in startup companies, as a form of debt that converts to equity in a future investing round. It is a hybrid investment vehicle, which carries the (limited) protection of debt at the start, but shares in the upside as equity if the startup is successful, while avoiding the necessity of valuing the company at too early a stage.

ChatGPTRate this definition:0.0 / 0 votes

1. convertible bond

   A convertible bond is a type of investment product issued by a company that combines a bond and an option to convert the bond into a predetermined number of shares in the company at certain times during its life. It is a type of hybrid security that has characteristics of both debt and equity. This bond typically pays interest, but the investor has the option to convert the bond into stock instead of receiving the principal back on maturity. It's often used by companies as a way to raise capital with potentially lesser burden of direct interest costs.

WikidataRate this definition:0.0 / 0 votes

1. Convertible bond

   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 convert into a specified number of shares of common stock in the issuing company or cash of equal value. It is a hybrid security with debt- and equity-like features. It originated in the mid-19th century, and was used by early speculators such as Jacob Little and Daniel Drew to counter market cornering. Convertible bonds are most often issued by companies with a low credit rating and high growth potential. To compensate for having additional value through the option to convert the bond to stock, a convertible bond typically has a coupon rate lower than that of similar, non-convertible debt. The investor receives the potential upside of conversion into equity while protecting downside with cash flow from the coupon payments and the return of principal upon maturity. These properties lead naturally to the idea of convertible arbitrage, where a long position in the convertible bond is balanced by a short position in the underlying equity. From the issuer's perspective, the key benefit of raising money by selling convertible bonds is a reduced cash interest payment. The advantage for companies of issuing convertible bonds is that, if the bonds are converted to stocks, companies' debt vanishes. However, in exchange for the benefit of reduced interest payments, the value of shareholder's equity is reduced due to the stock dilution expected when bondholders convert their bonds into new shares.

Matched Categories

1. • Bond

How to pronounce convertible bond?

1. Alex

   US English

   David

   US English

   Mark

   US English

   Daniel

   British

   Libby

   British

   Mia

   British

   Karen

   Australian

   Hayley

   Australian

   Natasha

   Australian

   Veena

   Indian

   Priya

   Indian

   Neerja

   Indian

   Zira

   US English

   Oliver

   British

   Wendy

   British

   Fred

   US English

   Tessa

   South African

How to say convertible bond in sign language?

Numerology

1. Chaldean Numerology

   The numerical value of convertible bond in Chaldean Numerology is: 7

2. Pythagorean Numerology

   The numerical value of convertible bond in Pythagorean Numerology is: 7

Examples of convertible bond in a Sentence

1. Dave King:

   The timing of a convertible bond deal with the company's entrance into the S&P 500 makes sense, there will likely be a strong bid for the stock from index funds.

2. Arnaud Brillois:

   When you have a stock going up, the convertible bond is going to capture a large part of the equity’s rise, the convertible bond will perform approximately 950% or 970% when the equity is doing 1000%.

3. Prasanth Manghat:

   There's a high possibility for us go for loans. We haven't tried the bond market, but with our stock doing well there's opportunity for a convertible bond.

References

1. ^ Princeton's WordNet
   http://wordnetweb.princeton.edu/perl/webwn?s=convertible bond
2. ^ Wikipedia
   https://en.wikipedia.org/wiki/Convertible_Bond
3. ^ ChatGPT
   https://chat.openai.com
4. ^ Wikidata
   https://www.wikidata.org/w/index.php?search=convertible bond