Conversion feature

Conversion feature

Specification of the right to transform a particular investment to another form of investment, such as switching between mutual funds or converting preferred stock or bonds to common stock.

Conversion Feature

The ability to change from one investment vehicle to another. For example, one may be able to switch between mutual funds in a fund family without incurring a penalty. Likewise, one may exchange a convertible bond to common stock in the issuing company. Sometimes, one even may be able to change an adjustable-rate mortgage into a fixed-rate mortgage. All of these examples describe a conversion feature on the investment vehicles.
References in periodicals archive ?
163(1)] will affect debt with a conversion feature where the conversion price is significantly higher than the market price of the stock on the issue date of the debt" (H.
An expanded Roth conversion feature will likely boost Roth adoption rates by plan sponsors and participants, says a study from Vanguard.
In addition to the basic conversion right that comes with Security Mutual's level term products, the new term product includes the option of adding an enhanced conversion feature for an additional charge.
Funders are realizing that if a level term policy has a conversion feature, it can be converted to a permanent contract--and then settled.
86 per share, with a contingent conversion feature of an additional 25%.
The Company determined the fair value of the embedded conversion feature and the free-standing warrants utilizing a Black-Scholes pricing model.
Much more common is a conversion feature providing the option that the debt obligation may be paid in, or converted into, equity.
The loan has a conversion feature to enable the developer to sell condo apartments at a later date.
Instead, the parent company's basis in the converted debentures is limited to the debentures' principal amount, and the excess of the value of the stock issued over this principal amount can be attributed to the conversion feature of the debentures.
The term derivative is based on the accounting definition and includes outstanding warrants to purchase common stock and the conversion feature in the Company's outstanding debentures.
For Federal income tax purposes, the debt's conversion feature is ignored; interest accrues at the debt instrument's overall yield based on the stated interest rate and any OID.
Whether the issuer allocates any portion of the bond proceeds to equity in order to reflect the conversion feature.