Convertible Bonds: Basics

Convertible Bonds: Basics

Intuition Publishing Pty Ltd
Updated Sep 24, 2020

A convertible bond can be converted in to a certain amount of a company's equity at specific times. When to convert the bond is usually at the bondholder's discretion, and will generally occur when the company's stock price performs well. We examine the main reasons that companies issue convertibles, and also look at the reasons why they are bought by investors.