Muuntovelkakirjat

Muuntovelkakirjat, also known as convertible bonds, are a type of debt instrument that can be converted into a predetermined number of shares of the issuing company's common stock. They offer investors a hybrid security, combining features of both bonds and stocks. As a bond, a muuntovelkakirja pays regular interest payments to the holder and has a maturity date at which the principal is repaid. However, its unique characteristic is the conversion feature.

This conversion option allows bondholders to exchange their bonds for shares of the issuing company's stock, typically when the stock price rises above a certain level. The conversion ratio, which specifies how many shares one bond can be converted into, is set at the time of issuance. The conversion price is the effective price per share at which the bond can be converted.

Muuntovelkakirjat can be attractive to investors seeking potential capital appreciation from stock price movements while still having the security of a fixed-income investment. For companies, issuing convertible bonds can be a way to raise capital with a lower interest rate compared to traditional bonds, as the conversion feature offers an added benefit to investors. It can also be seen as a delayed equity offering, allowing the company to potentially issue shares at a higher price in the future. The decision to convert is usually made by the bondholder when the value of the shares they would receive exceeds the bond's face value or when they anticipate further stock price growth.