konverteerimisõigust

Konverteerimisõigus refers to a legal right that allows for the conversion of one form of security or asset into another. This concept is most commonly encountered in the context of financial instruments, such as convertible bonds or preferred shares.

A convertible bond, for example, grants the bondholder the right to convert the bond into a predetermined number of shares of the issuing company's common stock. This conversion typically occurs at the option of the bondholder, often when the stock price rises above a certain level, making the conversion more attractive than holding the bond. Similarly, convertible preferred shares can be converted into common shares.

The existence of a konverteerimisõigus can influence the value and risk profile of the underlying security. For the issuer, it can offer a way to raise capital with potentially lower initial interest costs compared to non-convertible debt, as the conversion feature adds value for investors. For the investor, it provides an opportunity to participate in the potential upside of the company's stock while retaining the relative safety of a fixed-income instrument. The terms and conditions of the conversion, including the conversion ratio and period, are crucial elements defined in the contract governing the security.