konvertibeli
Konvertibeli is a term used in several languages to describe a financial instrument that can be converted into another security, typically equity, under predefined terms. The most common form is the convertible bond (or convertible note), issued by a corporation or government entity to raise capital while providing the investor an option to convert the debt into a specified number of shares of the issuer’s stock at a predetermined conversion price or ratio, during a defined conversion window or at maturity. Convertible preferred stock is another form that combines features of debt and equity and can be converted into common shares.
- Conversion price and conversion ratio: the price per share and the number of shares issued upon
- Maturity and coupons: traditional convertible bonds accrue interest and have a fixed maturity date; some structures
- Optionality and calls: investors may convert at their discretion within allowed periods; issuers may have call
- Dilution and protections: conversion can dilute existing shareholders; agreements may include anti-dilution provisions or adjustments to
- For investors: potential upside exposure to the issuer’s equity if the stock price rises, with downside
- For issuers: cheaper financing relative to straight debt due to lower coupons and the option to
- Convertible instruments are governed by securities laws and are typically classified as debt until conversion, with
Konvertibeli is commonly used in corporate finance and startup financing, offering a bridge between debt and
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