convertible-bond-issuance

Vocabulary Word

Definition

'Convertible-bond-issuance' is when a company releases bonds that can be transformed into stocks of that company. This is like inviting people to invest in the company with the option to become part-owners if they want.

Examples in Different Contexts

Convertible bond issuance in capital markets is a way for companies to raise capital by issuing bonds that investors can convert into stock at a later date. A capital markets professional might state, 'Convertible bond issuance is appealing to investors seeking income with the potential for equity upside.'

Practice Scenarios

Leadership

Scenario:

To optimize our capital structure, we need to consider more flexible options. Convertible bonds could be a strategic choice.

Response:

You're absolutely right; a strategic convertible bond issuance could optimize our capital structure and reduce debt.

Tech

Scenario:

Our startup is attractive to investors, but we need to strike a balance between our liabilities and equity. Given the scenario, how do you think convertible bonds would factor in?

Response:

Convertible bond issuance could incentivize our investors with a potential equity upside. It's worth considering.