convertible bond

USAGE SUMMARY

"convertible bond" is a correct and usable phrase in written English.
You can use it when referring to a bond (e.g., a corporate bond) that can be converted into shares of common stock, usually at the discretion of the bondholder. For example: "The company offered a 10% interest rate on their convertible bond, making it an attractive investment option."

✓ Grammatically correct

News & Media

Science

Formal & Business

Human-verified examples from authoritative sources

Exact Expressions

60 human-written examples

A convertible bond is a hybrid security that can be converted into company stock, potentially diluting the stock's value.

The New York Times

Convertible Bonds The convertible bond market has returned to life.

The New York Times

Goldman's role in Ford's convertible bond sale is particularly illuminating.

The New York Times

"I see myself, for example, as a convertible bond," Professor Bodie said.

The New York Times

The figures include I.P.O.'s, follow-up offerings and convertible bond sales.

The New York Times

"If the stock went down 25 percent, the convertible bond would roughly break even".

The New York Times

Suntech is also weighing alternatives to cover a $541 million convertible bond due in 2013.

The New York Times

Santander is sounding out retail investors about a €5 billion convertible bond issue.

The Economist

He raised nearly $8 billion last year in stock and convertible bond offerings.

The New York Times

In dollars raised, May 2003 was the third-busiest month ever for convertible bond issuance.

The New York Times

Berkshire's partners in the convertible bond investment were Longleaf Partners Funds and Legg Mason.

The New York Times

Expert writing Tips

Best practice

When discussing "convertible bonds", clearly state the conversion ratio or formula to ensure clarity about the potential equity dilution.

Common error

Avoid assuming all "convertible bonds" have the same conversion terms. Always specify the conversion ratio, price, and any conditions attached to the conversion feature to prevent confusion.

Linguistic Context

The phrase "convertible bond" functions primarily as a noun phrase, identifying a specific type of debt security. It acts as a subject or object in sentences related to finance and investment, as shown in Ludwig's examples.

Expression frequency: Very common

Frequent in

News & Media

45%

Science

30%

Formal & Business

15%

Less common in

Wiki

5%

Encyclopedias

3%

Reference

2%

Ludwig's WRAP-UP

The term "convertible bond" is a well-established and frequently used noun phrase in the world of finance, denoting a specific type of debt security that can be converted into equity. As confirmed by Ludwig AI, it is grammatically correct and suitable for use in various contexts. Its primary function is to clearly identify this hybrid financial instrument. The phrase appears most often in News & Media and Scientific publications. When using "convertible bond", clarity is key, especially regarding conversion terms, as misunderstanding these terms is a common error.

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

convertible security

Broader term encompassing various types of securities that can be converted into stock.

convertible debt instrument

Specifies that the convertible bond is a form of debt.

equity-linked bond

Highlights the bond's connection to the company's equity.

hybrid security

Focuses on the dual nature of the bond as both debt and equity.

bond with conversion option

Emphasizes the option to convert the bond into stock.

exchangeable bond

Similar to convertible bonds, but can be exchanged for shares of a company other than the issuer.

debt convertible to equity

Rephrases the concept, highlighting the transformation from debt to equity.

contingent convertible

A bond that converts to equity if certain conditions are met.

coco bond

Short for contingent convertible bond, often used by financial institutions.

zero-coupon convertible

A convertible bond that doesn't pay regular interest but is issued at a discount.

FAQs

How does a "convertible bond" work?

A "convertible bond" is a type of bond that can be converted into a predetermined amount of the issuer's equity at certain times during its life, usually at the discretion of the bondholder.

What are the advantages of investing in "convertible bonds"?

"Convertible bonds" offer a blend of fixed income and potential equity upside. They can provide downside protection compared to stocks, while still allowing investors to participate in potential stock appreciation. For other types of investment you can see "convertible security".

What are the risks associated with "convertible bonds"?

Risks include interest rate risk, credit risk of the issuer, and the possibility that the stock price may not rise enough to make conversion profitable. Additionally, conversion can dilute existing shareholders' equity.

How does a "convertible bond" differ from a regular bond?

Unlike regular bonds, "convertible bonds" offer the option to convert into equity. Regular bonds only provide fixed income payments and repayment of principal at maturity. Other type of bonds could be an "exchangeable bond".