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Exchangeable

   Also found in: Dictionary/thesaurus, Medical, Legal, Idioms, Encyclopedia, Wikipedia, Hutchinson 0.01 sec.
Exchangeable
Applies mainly to convertible securities. Means the issuer, if so stated, may substitute a convertible debenture for an existing convertible preferred with identical terms. Most often used when a corporation has an immediate need for equity capital and a low tax rate, and expects either or both conditions to change. This would make the debenture less attractive if the interest tax-deductibility is lost.

Exchangeable
Describing a security, especially a debt or preferred stock, that may be traded for common stock at a certain strike price. See: Convertible security.


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