Zero-coupon convertible bond

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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 ?
March 30 /PRNewswire-FirstCall/ -- International Game Technology announced today the expiration and preliminary results of its offer to exchange up to $969,712,000 in aggregate principal amount at maturity of new Zero-Coupon Convertible Debentures due January 29, 2033 ("new debentures") for an equal aggregate principal amount at maturity of its currently outstanding Zero-Coupon Convertible Debentures due January 29, 2033 ("old debentures").
30, 2006 holders of approximately $317 million of the company's Exchange Zero-Coupon Convertible Senior Subordinated Notes due 2022 exercised their put option.
March 15 /PRNewswire-FirstCall/ -- International Game Technology announced today that it has amended its offer to exchange up to $969,712,000 in aggregate principal amount at maturity of new Zero-Coupon Convertible Debentures due January 29, 2033 ("new debentures") for an equal aggregate principal amount at maturity of its currently outstanding Zero-Coupon Convertible Debentures due January 29, 2033 ("old debentures").
30, 2006 holders of approximately $317 million of the HMA's exchange zero-coupon convertible senior subordinated notes due 2022 exercised their put option.
New York City time on Tuesday, March 14, 2006, unless otherwise terminated or further extended, the expiration of its offer to exchange up to $969,712,000 in aggregate principal amount at maturity of new Zero-Coupon Convertible Debentures due January 29, 2033 ("new debentures") for an equal aggregate principal amount at maturity of its currently outstanding Zero-Coupon Convertible Debentures due January 29, 2033 ("old debentures").
30, 2005, and consisted primarily of $500 million 1% convertible subordinated notes due 2010, approximately $400 million 6 1/2% senior subordinated notes due 2013, approximately $462 million 6 1/4% senior subordinated notes due 2014, and $195 million zero-coupon convertible junior subordinated notes due 2008.
Proceeds from the offering will be used to repurchase a portion of the company's zero-coupon convertible debentures due 2021, either in open-market purchases, negotiated transactions or upon exercise by holders of a put option in April 2002.
8 billion as of June 30, 2005, and consisted primarily of: $500 million 1% convertible subordinated notes due 2010; approximately $400 million 6 1/2% senior subordinated notes due 2013; approximately $507 million 6 1/4% senior subordinated notes due 2014; and $200 million zero-coupon convertible junior subordinated notes due 2008.
Proceeds from the offering will be used to retire the company's zero-coupon convertible debentures due 2021, either in open-market purchases, negotiated transactions or upon exercise by holders of a put option in April 2002, and for general corporate purposes.
The company has reduced debt over the past year by repurchasing approximately $180 million accreted value of zero-coupon convertible debentures due 2021 (putable in February 2006) through a series of open market transactions.
NYSE: TYC; LSE: TYI; BSX: TYC) today announced that a registration statement relating to the resale of zero-coupon convertible senior debentures due February 12, 2021 issued by Tyco International Group S.
The Company will have access to the full $500 million revolving credit facility if, by the end of January 2005, Sanmina raises a specified amount (currently $300 million) of additional debt or equity capital and uses or sets aside these proceeds to repay approximately $630 million accreted value of zero-coupon convertible subordinated debentures that will be putable to the Company in Sept.