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

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.

Accounting

Scenario:

Our financial statements exhibit potential for convertible bonds strategy. It could be an optimal fusion of liabilities and equity to streamline finances.

Response:

The convertible bond issuance indeed reflects both our liability and equity positions. It can help streamline our financial management.