Convertible bond

• Bonds that can be converted into common stock at the option of the holder.

• A bond containing a provision that permits conversion to the issuer's common stock at the option of the bond holder at some fixed exchange ratio. Bondholder will only convert when stock prices have increased above the conversion price (break-even price).

• A bond that can be changed into a specified number of common shares at the option of the bondholder.

• Is a credit instrument which is convertible into equity. Usually, this conversion is done at the discretion and exercise of the bond holder and not the corporation. However, there may be forced conversions due to stipulated events such as takeovers or call options in favor of the issuer. Generally, convertible bonds are coupons paying but there are zero coupon convertible bonds as well. These bonds tend to have lower-than-market rates of interest in exchange for a potential equity stake for the bondholder.


Follow this link for all the terms related to bond.

 Embedded terms in definition
Call option
Common shares
Common stock
Conversion price
Forced conversion
 Related Terms
Accrual bond
Ban or bond anticipation note
Bearer bond
Bond agreement
Bond arbitrage hedge funds
Bond covenant
Bond equivalent basis
Bond equivalent yield
Bond fund
Bond indenture
Bond indexing
Bond points
Bond quote
Bond rating
Bond refunding decision
Bond value
Bull bear bond
Bulldog bond
Busted convertible
Call price bond
Callable bond
Collateral trust bond
Convertible eurobond
Convertible exchangeable preferred stock
Convertible preferred
Convertible preferred shares
Convertible preferred stock
Convertible price
Convertible securities hedge funds
Convertible security
Corporate bond
Corporate bond equivalent
Coupon bond
Debenture bond
Deep discount bond
Discount bond
Dollar price of a bond
Equivalent bond yield
Extendable bond
Face value of a bond
Fidelity bond
Flower bond
Foreign bond
Foreign bond market
Full coupon bond
General obligation bond
Government bond
High coupon bond refunding
High yield bond
Income bond
Indenture of a bond
Indexed bond
Industrial revenue bond
Inflation indexed treasury bond
Insured bond
International bond
Jump bond
Junk bond
Level coupon bond
Limited tax general obligation bond
Low coupon bond refunding
Market premium convertible securities
Mismatch bond
Mortgage bond
Municipal bond
Municipal bond fund
Par bond
Payment in kind pik bond
Performance bond
Positive covenant of a bond
Premium bond
Prerefunded bond
Pure discount bond
Put bond
Refunded bond
Registered bond
Revenue bond
Samurai bond
Series bond
Series ee bond
Series hh bond
Shogun bond
Single payment bond
Speculative grade bond
Step up bond
Straight bond
Straight bond value
Stratified sampling bond indexing
Stripped bond
Subordinated debenture bond
Sushi bond
T bond
Term bond
Treasury bond
U.s. treasury bond
Variable rated demand bond vrdb
Yankee bond
Z bond
Z or accrual bond
Zero coupon bond

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