Convertible Bond Stocks List
Symbol | Grade | Name | % Change | |
---|---|---|---|---|
MAMB | C | Monarch Ambassador Income ETF | 0.24 | |
SMTH | C | ALPS Smith Core Plus Bond ETF | 0.16 | |
SHG | C | Shinhan Financial Group Co Ltd | 1.04 | |
BCV | C | Bancroft Fund, Ltd. | 1.01 | |
ECF | C | Ellsworth Fund Ltd | 1.15 | |
BTZ | C | BlackRock Credit Allocation Income Trust | 0.77 | |
LBAY | C | Leatherback Long/Short Alternative Yield ETF | 0.06 | |
TOWN | B | Towne Bank | 0.62 | |
CGO | B | Calamos Global Total Return Fund | 0.19 | |
CWB | B | SPDR Bloomberg Convertible Securities ETF | 0.90 |
Related Industries: Asset Management Banks - Regional - Asia Banks - Regional - US Capital Markets
Symbol | Grade | Name | Weight | |
---|---|---|---|---|
INKM | A | SPDR SSgA Income Allocation ETF | 4.0 | |
GINX | B | SGI Enhanced Global Income ETF | 3.06 | |
YYY | A | YieldShares High Income ETF | 2.86 | |
CEFD | C | ETRACS Monthly Pay 1.5X Leveraged Closed-End Fund Index ETN | 2.16 | |
FLKR | C | Franklin FTSE South Korea ETF | 2.04 |
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- Convertible Bond
In finance, a convertible bond or convertible note or convertible debt (or a convertible debenture if it has a maturity of greater than 10 years) is a type of bond that the holder can convert into a specified number of shares of common stock in the issuing company or cash of equal value. It is a hybrid security with debt- and equity-like features. It originated in the mid-19th century, and was used by early speculators such as Jacob Little and Daniel Drew to counter market cornering.Convertible bonds are most often issued by companies with a low credit rating and high growth potential. Convertible bonds are also considered debt security because the companies agree to give fixed or floating interest rate as they do in common bonds for the funds of investor. To compensate for having additional value through the option to convert the bond to stock, a convertible bond typically has a coupon rate lower than that of similar, non-convertible debt. The investor receives the potential upside of conversion into equity while protecting downside with cash flow from the coupon payments and the return of principal upon maturity. These properties lead naturally to the idea of convertible arbitrage, where a long position in the convertible bond is balanced by a short position in the underlying equity.
From the issuer's perspective, the key benefit of raising money by selling convertible bonds is a reduced cash interest payment. The advantage for companies of issuing convertible bonds is that, if the bonds are converted to stocks, companies' debt vanishes. However, in exchange for the benefit of reduced interest payments, the value of shareholder's equity is reduced due to the stock dilution expected when bondholders convert their bonds into new shares.
Convertible notes are also a frequent vehicle for seed investing in startup companies, as a form of debt that converts to equity in a future investing round. It is a hybrid investment vehicle, which carries the (limited) protection of debt at the start, but shares in the upside as equity if the startup is successful, while avoiding the necessity of valuing the company at too early a stage.
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