convertible bond
convertible bond see bond 2

Merriam-Webster’s Dictionary of Law. . 1996.

convertible bond
A debt instrument convertible generally during a specified period of time into a number of newly-issued listed ordinary shares of the issuer at a predetermined conversion price. The conversion period will frequently be from a date 40 days after the date of issue until a date just prior to any date fixed for redemption of the bond.
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USA
Also known as a convertible note and a convertible debenture. A type of debt instrument that can be converted into another security, usually shares of stock, of the issuing company, usually at some pre-announced ratio based on a fixed number of securities and a set price. It is a hybrid security with debt and equity-like features. Although it typically has a low coupon rate, the holder is compensated with the ability to convert the bond to common stock, usually at a substantial discount to the stock's market price.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Look at other dictionaries:

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