Indenture Convert to Word For Free

Convertible debt offers bondholders the potential to benefit from future increases in the value of the issuing company's equity. If the stock price rises above the conversion price, bondholders can convert their debt into equity, resulting in capital gains and participation in the company's growth.

In finance, a convertible bond or convertible note or convertible debt (or a convertible debenture if it has a maturity of greater than 10 years) is a type of bond that the holder can convert into a specified number of shares of common stock in the issuing company or cash of equal value.

With convertible debt, a business borrows money from a lender or investor where both parties enter the agreement with the intent (from the outset) to repay all (or part) of the loan by converting it into a certain number of its preferred or common shares at some point in the future.

Mandatory convertibles will automatically be converted to stock at a specific time, unlike normal convertible securities, which the holder has the right to convert at any time.

By this logic, the convertible bond allows the issuer to sell common stock indirectly at a price higher than the current price. From the buyer's perspective, the convertible bond is attractive because it offers the opportunity to obtain the potentially large return associated with stocks, but with the safety of a bond.

Corporations like convertible bonds because they lower their cost of capital. It's a cheap way to borrow money to improve the business. Tesla's Gigafactory was built with money raised in a convertible bond issue.

A convertible bond is a fixed-income corporate debt security that yields interest payments, but can be converted into a predetermined number of common stock or equity shares. The conversion from the bond to stock can be done at certain times during the bond's life and is usually at the discretion of the bondholder.

Like traditional corporate bonds, convertible bonds may entitle their holders to coupon (interest) payments at regular intervals and can usually be redeemed for their par value (original price) upon maturity, assuming they were not already converted into shares.

Indenture refers to a legal and binding agreement, contract, or document between two or more parties.Historically, indenture has also referred to a contract binding one person to work for another for a set period of time (indentured servant), particularly European immigrants.

A written agreement between the issuer of debt securities (such as bonds, notes, or debentures) and the trustee for the debt securities acting as a representative of the securityholders that specifies the terms and conditions of the debt securities, including the interest rate, maturity, any redemption terms, timing,