convertible bond

Noun

Meaning

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

Hypernyms

Examples

Convertible arbitrage consists of buying a convertible bond and hedging two of the three factors in order to gain exposure to the third factor at a very attractive price. Source: Internet

Convertible bond arbitrage A convertible bond is a bond that an investor can return to the issuing company in exchange for a predetermined number of shares in the company. Source: Internet

Glencore, the Swiss-based mining and commodities group, issued a $500m seven year equity-neutral convertible bond on Tuesday that achieved terms described as very aggressive. Source: Internet

For instance an arbitrageur would first buy a convertible bond, then sell fixed income securities or interest rate futures (to hedge the interest rate exposure) and buy some credit protection (to hedge the risk of credit deterioration). Source: Internet

When rates move higher, the bond part of a convertible bond tends to move lower, but the call option part of a convertible bond moves higher (and the aggregate tends to move lower). Source: Internet

In legal and accounting terms, until a convertible bond has been converted, it counts as a loan. Source: Internet

Close letter words and terms