exchangeable bond


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Exchangeable Debt

A debt security that the holder may exchange, at a certain price, for common stock in the company other than the one that issued the debt security. The number of shares one receives for each security and the price one pays for those shares are determined when the exchangeable debt is issued. Most of the time, the common stock is in a subsidiary of the company that issued the exchangeable debt. Exchangeable debt is a low-risk investment, but it affords the investor a great amount of leeway because he/she can exchange it for another security with higher risk and a higher return. Exchangeable debt operates like a convertible bond; the main difference is the fact that in a convertible bond the common stock that one may buy is the stock of the company issuing the bond rather than that of a subsidiary.

exchangeable bond

A special type of convertible security that permits the holder to exchange the bond for shares of a company in which the issuer has an ownership position. An exchangeable bond differs from an ordinary convertible bond in that a convertible permits the holder to convert it into shares of stock of the issuer.
References in periodicals archive ?
This paper focuses on the use of a particular type of the convertible bonds during the privatization process, namely the exchangeable bonds. The issues of such instruments are dominated mainly by the companies from the private sector.
* Purchase a European put option which allows the buyer to sell the block of the convert's stock at a price equal to the face value of the exchangeable bond, P(S, X).
Pangilinan noted there are still hospital acquisitions being worked on, but it has just been taking time to conclude the deals because the Metro Pacific hospital group has re-focused attention on the IPO and exchangeable bond offer plans.
the largest exchangeable bond ever issued by an unrated entity;
Abu Dhabi: Aabar Investments has issued debt of a e1/42 billion exchangeable bond with a creative structure that combines Aabar's reputation as a long-term investor with the financial strength of its parent, the International Petroleum Investment Company (IPIC).
The country is gearing up for its second attempt to launch an offshore exchangeable bond, as it hopes to present a picture of improving credit with a current account surplus in the first nine months of fiscal year 2010-11.
However, it confirmed its fullyear target for a higher pre-tax profit in 2008 when excluding an exceptional gain last year on a Rolls-Royce exchangeable bond.
An exchangeable bond gives the holder the option to exchange the bond for stock of a company other than the issuer at some future date.
Due to the ongoing exchange of ALSO shares relating to the Exchangeable Bond issued by Schindler Holding AG, Schindler announced that Schindler Holding AGs investment holding of ALSO shares has fallen below 10 percent.
This exchangeable bond will be launched outside the US to non-US persons, pursuant to Regulation S under the US Securities Act.
ISLAMABAD, July 05, 2011 (Balochistan Times): Referring to reports regarding Oil and Gas Development Company Limited (OGDCL) Exchangeable Bond transaction published/ telecast in a section of print and electronic media during the recent past, a spokesman of the Privatisation Commission (PC) while clarifying the factual situation said that it was the intention of the Government of Pakistan (GoP) to complete the transaction within the previous fiscal year, however, the international financial markets became extremely volatile towards the end of the fiscal year due to the Greece Crisis and weak economic data emerging from USA.
As per newspaper reports, the government is planning raising US$575mn through listing of Exchangeable Bond (EB), Initial Public Offerings (IPO) and Secondary Public Offerings (SPO) of State-Owned Entities (SOEs).