forced conversion

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Forced conversion

Occurs when a convertible security is called in by the issuer, usually when the underlying stock is selling well above the conversion price. The issuer thus assures the bonds will be retired without requiring any cash payment. Upon conversion into common, the carrying value of the bonds becomes part of a corporation's equity, thus strengthening thebalance sheet and enhancing future debt capability.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Forced Conversion

In a callable convertible security, a situation in which the issuer calls the security, which requires the holder to exercise the conversion option and exchange the security for common stock. An issuer may authorize a forced conversion when interest rates decline and it can issue the same amount of debt at a lower cost of capital. However, a forced conversion may not be advantageous to the security holder because common stock is riskier and the combination of dividends and capital appreciation may not equal the coupon rate the holder was receiving prior to conversion.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

forced conversion

The call for redemption of a convertible security at a price lower than the market value of the underlying asset into which the convertible may be exchanged. The investor finds it more favorable to exchange the convertible for the underlying asset than to give up the security for cash at the call price. For instance, suppose a $1,000 principal bond with a call price of $1,080 is converted into 20 shares of stock selling at $70 each. The bond is worth $1,400 in underlying stock. If the issuer calls the bond, the investor will be forced to convert before the call becomes effective.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
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PESHAWAR -- The Sikh community has urged the government to stop forced conversions of the girls belonging to minority groups through proper legislation to remove the sense of insecurity among them.
The issue of forced conversions of minority women came under the media spotlight as recently a 19-year-old Sikh girl was allegedly forced to embrace Islam after being married to a Muslim youth.
ISLAMABAD -- The Ministry of Human Rights has formed a task force against forced conversions of religious believes to amicably deal with the situation and ensure religious rights of all the people in the country.
I urge @narendramodi Ji & @DrSJaishankar Ji to raise this issue at global level bcos forced conversions happening in Pakistan have angered all the Sikhs.
The report also critiqued the blasphemy law and touched upon the issue of forced conversions of non-Muslims.
The basic purpose of this meeting was to discuss the important issue regarding forced conversions which are being reported in Sindh.
ISLAMABAD -- A bill against forced conversions tabled in the National Assembly on Tuesday was sent to the standing committee after getting support from the Minister of Law Farogh Naseem.
Pakistan Tehreek-i-Insaf MNA Rumesh Kumar presented a Bill in the National Assembly on March 26 to end forced conversions in Pakistan.
The province's Hindu community and civil society had raised concerns over the increasing number of the incidents of forced conversions. islamabad Police have detained at least seven people, including a Nikah Khwan (marriage officiator), suspected of involvement in the alleged abductions, forced conversions from Hindusim to Islam, and underage marriages of two minor sisters reported in Ghotki.
Ramesh Kumar Vankwani said the government was going to bring a legislation to permanently end incidents of forced conversions.
In the aftermath of the incident, MPA Nand Kumar Goklani, who had initially moved a bill against forced conversions, urged the government to get a law passed immediately.