Series 6: 4.2.9.4. Convertible Debentures

4.2.9.4.  Convertible Debentures

Convertible bonds are bonds that can be converted into shares of preferred or (more often) common stock at a fixed conversion ratio, which is stipulated in the indenture. The convertible feature allows issuers to pay lower yields on debt and to raise equity capital without a public equity offering. It generally allows investors to choose when they want to convert, giving the investor an additional option and thus additional value.

Convertible debentures are usually offered as