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conversion premium

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Conversion Premium
The amount by which the price of a convertible security exceeds the current market value of the common stock into which it may be converted.

Notes:
Most convertible securities trade at a price above its conversion value.

Conversion premium
The extent by which the conversion price of a convertible security exceeds the prevailing common stock price at the time the convertible security is issued. In general usage, the conversion premium is the amount by which the convertible security trades above its conversted value. For example, if a $1,000 par bond is trading at $1,100, it is convertible into 50 shares, and the shares are trading at $21, the converted value is 50 X 20.50 = $1,025, and the conversion premium is $75.
conversion premium
The excess at which a convertible security sells above its conversion value. The conversion premium usually declines as a convertible security rises in market price. A bond trading at $1,400 and convertible into 50 shares of common stock with a current market price of $22 each sells at a conversion premium of $1,400 - (50 × $22), or $300.
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? Mentioned in ? References in periodicals archive
 
25 percent coupon and a 22 percent conversion premium.
BRIEFCASE VALLEY MALL GETS MARKETING HONOR by Daily News (Los Angeles, CA)
g) Adjustment represents the conversion premium on the $25 million of subordinated convertible debentures that was paid in shares of K2 common stock.
K2 Inc. Raises Fiscal 2006 Financial Guidance by Business Wire
This represents a 26 percent conversion premium based on the last reported sale price of $46.
Chattem, Inc. Announces Pricing of Convertible Notes Offering by Business Wire
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