What is convertible equity (or a convertible security)? (opens in new tab)

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15 pointsyokumtaku13y ago4 comments

4 comments

3 comments · 1 top-level

papercrane13y ago· 2 in thread

So its just a mandatory convertible zero interest bond? Why is it called convertible equity?

lucasgonze13y ago

Because you redeem it for equity at a rate defined in the next round but within the cap and discount parameters.

papercrane13y ago

Wouldn't a mandatory convertible be converted at the current valuation as well though? Forgive me if I'm being obtuse, my experience is with convertible bonds that are backed by publicly traded equities, not private equities.

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