Printer Friendly
The Free Dictionary
1,087,535,885 visitors served.
?
Dictionary/
thesaurus
Medical
dictionary
Legal
dictionary
Financial
dictionary
Acronyms
 
Idioms
Encyclopedia
Wikipedia
encyclopedia
?

Convertible Bond
(redirected from Convertible debt)

   Also found in: Wikipedia 0.03 sec.
Convertible Bond
A bond that can be converted into a predetermined amount of the company's equity at certain times during its life, usually at the discretion of the bondholder. Convertibles are sometimes called "CVs".

Notes:
Issuing convertible bonds is one way for a company to minimize negative investor interpretation of its corporate actions. For example, if an already public company chooses to issue stock, the market usually interprets this as a sign that the company's share price is somewhat overvalued. To avoid this negative impression, the company may choose to issue convertible bonds, which bondholders will likely convert to equity anyway should the company continue to do well.

From the investor's perspective, a convertible bond has a value-added component built into it it is essentially a bond with a stock option hidden inside. Thus, it tends to offer a lower rate of return in exchange for the value of the option to trade the bond into stock.


Convertible bond
General debt obligation of a corporation that can be exchanged for a set number of common shares of the issuing corporation at a prestated conversion price.


How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content.
?Page tools
Printer friendly
Cite / link
Email
Feedback
Add definition
? Mentioned in ? References in periodicals archive
 
Other large cable and media companies have issued various types of convertible debt including Liberty Media, News Corp.
2002-31, the IRS concluded that a convertible debt instrument issued with contingent interest that is neither "remote nor incidental" is subject to the Regs.
One, Accounting for Financial Instruments with Characteristics of Liabilities, Equity, or Both, would provide guidance on accounting for the noncontrolling interest in a consolidated subsidiary, for costs incurred in issuing a financial instrument that has liability or equity characteristics and for repayments and conversions of convertible debt.
 
Financial browser? ? Full browser
 
 
Financial Dictionary
?

Disclaimer | Privacy policy | Feedback | Copyright © 2008 Farlex, Inc.
All content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional.. Terms of Use.