Convertible Bonds
Convertible bonds are bonds that can be converted into shares of stock in the issuing company, usually at some pre-announced ratio. It is a hybrid security with debt- and equity-like features. It can be used by investors to obtain the upside of equity-like returns while protecting the downside with regular bond-like coupons.
Read more about this topic: Equity Derivative
Famous quotes containing the words convertible and/or bonds:
“Herein is the explanation of the analogies, which exist in all the arts. They are the re-appearance of one mind, working in many materials to many temporary ends. Raphael paints wisdom, Handel sings it, Phidias carves it, Shakspeare writes it, Wren builds it, Columbus sails it, Luther preaches it, Washington arms it, Watt mechanizes it. Painting was called “silent poetry,” and poetry “speaking painting.” The laws of each art are convertible into the laws of every other.”
—Ralph Waldo Emerson (1803–1882)
“My Christian friends, in bonds of love, whose hearts in sweetest union join,
Your friendship’s like a drawing band, yet we must take the parting hand.
Your company’s sweet, your union dear; Your words delightful to my ear,
Yet when I see that we must part, You draw like cords around my heart.”
—John Blain (18th century)