Zero-coupon convertible bond

(redirected from Zero Coupon Convertible Bond)

Zero-Coupon Convertible Bond

1. A bond that may be converted into common stock in the company issuing it. A zero-coupon convertible bond is sold at a discount from par and matures at par. They tend to be volatile in the secondary market because the convertible option may or may not become worthwhile, depending on how the company is performing. Additionally, like all zeros, they can fluctuate in price, sometimes dramatically, with changes in interest rates.

2. A municipal bond that may be converted into a corporate bond in the company issuing it. A zero-coupon convertible bond is sold at a discount from par and matures at par. They tend to be volatile in the secondary market because the convertible options may or may not become worthwhile, depending on how the companies they represent are performing. These zero-coupon convertibles are tax-exempt, but are convertible to other bonds that may yield more.

Zero-coupon convertible bond.

A zero-coupon convertible bond, like other convertible bonds, can be converted into stock in the issuing corporation if the stock reaches the trigger price.

Municipalities may issue tax-exempt zero-coupon convertible bonds you can exchange before maturity for conventional taxable bonds.

The advantage of both taxable and tax-exempt zero-coupon convertibles is that they give you access to a potentially substantial gain for a small initial investment since you purchase the zero-coupon for less than the face value. But like all zero-coupons, these convertibles tend to be more volatile in the secondary market than nonconvertible bonds.

References in periodicals archive ?
the Au"Company") hereby notifies that the conversion rights associated with the Euro Yen Zero Coupon Convertible Bonds due 2015 issued on February 4, 2010 by the Company has been finally exercised as follows.
The Firm represented the underwriters, led by Merrill Lynch, Citigroup and Credit Suisse, in the offering of US$300 million principal amount of Zero Coupon Convertible Bonds (the Bonds ) by Zhen Ding Technology Holding Limited ( Zhen Ding ).
9 million) offering of zero coupon convertible bonds.
issued by NDBEC, which are 5-year, zero coupon convertible bonds with a 9%
A primary purpose of the issue of the Bonds is the refinancing of the JPY250 billion Zero Coupon Convertible Bonds due 2009 issued by the Company in 2002 (International Security Identification Number (ISIN): XS0147563455 and Common Code: 014756345) (the "Existing Bonds").
Compensation of part of the debt with zero coupon convertible bonds and the interest is included in the bond,
Others, such as zero coupon bonds, zero coupon convertible bonds (most commonly, Merrill-Lynch's Liquid Yield Option Notes, or LYONs), puttable bonds, and high-yield or junk bonds are relatively new.
TSE:6501)(NYSE:HIT) today announced the adjustment of the amount to be paid upon exercise of the Stock Acquisition Rights (the "Conversion Price") of Series B Zero Coupon Convertible Bonds due 2009 (the "Series B Convertible Bonds") which the Company issued on October 19, 2004.
announced today that it has priced its offerings of RMB1,110 million USD settled, zero coupon convertible bonds due 2012.
NYSE:HIT) (TOKYO:6501) (the "Company") today announced the adjustment of the amount to be paid upon exercise of the Stock Acquisition Rights (the "Conversion Price") of Series A Zero Coupon Convertible Bonds due 2009 (the "Series A Convertible Bonds") which the Company issued on October 19, 2004.
A resolution has been passed by the Board of directors of Renaissance Services in order to raise RO40 million through the issue of zero coupon convertible bonds.