The information provided are for general consumption only. Do not construe this as an offer/advice/research to buy/sell any securities

convertible bonds.png

Convertible Bonds

Convertible bonds are bonds that can be converted in equity or stock of the issuing company at specific times or when certain conditions are met. For companies, convertible bonds offer a flexible financing alternative. For investors, convertible bonds have the double advantage of interest payments as debt and rapid price appreciation after conversion into stock. The conversion of debt into stock may be optional (left to the investor) or mandatory at a future time(s) or when certain conditions are met.

People

Invest in safer portfolio without compromising returns.

Dezerv Debt PMS strategy designed by our investment experts

Learn more

up arrow
Loading...

Discover popular bonds

Still got questions? We’re here to help.

A Convertible Bond is a special type of corporate debt that combines features of both debt and equity. It gives the bondholder the right (or obligation) to convert the bond into shares of the issuing company at a predetermined price.
Convertible Bonds are suitable for patient investors willing to wait until maturity. They are particularly attractive when companies have high growth potential and low capital. As these companies grow, the value of their shares increases, offering substantial returns to investors upon conversion. However, investors need a good understanding of market trends to assess associated risks.
Mandatory Convertible Bonds require investors to convert the bonds into shares as determined by the issuing company. These bonds provide regular interest payments until maturity, at which point they are automatically and mandatorily converted into equity shares.
Convertible Bonds offer dual benefits. Investors receive a fixed rate of interest until maturity, similar to regular bonds. Additionally, they benefit from potential stock value appreciation. If the company does well, the value of its shares increases, providing investors with profit when they convert the bonds into stocks.