Description
Convertible Bonds are securities that offer you the right to acquire common stock of the issuing corporation under specified conditions rather than by direct purchase in the market. The terms at which the security can be exchanged for the issuer's common stock are set forth in the bond indenture. The option to convert is solely at your discretion and will only be exercised when and if you find such an exchange desirable. New issue Convertible Bonds generally have a maturity of 5 to 30 years and offer a lower coupon rate than that of nonconvertible bonds of comparable quality.
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Benefits
Enjoy the potential for appreciation of the common stock combined with relative investment safety. If the price of the underlying common stock declines, the bond's price can be expected to fall only to a point where it yields a satisfactory return on its value as a straight bond. You receive the potential growth of a stock, plus the stability of a bond.
This flexible investment is available in a variety of maturities so you can choose the time frame that works best for you.
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Features
Maturities range from 5 to 30 years and can be extended indefinitely if you choose to convert your bond to common stock.
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Related Products/Services
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Treasury STRIPS
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Convertible Bonds