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The simultaneous purchase of convertible bonds and the short sale of the same issuer's common stock is a hedge fund strategy known as convertible arbitrage. The motivation for such a strategy is that the equity option embedded in a convertible bond is a source of cheap volatility, which can be exploited by convertible arbitrageurs.
The conversion price for the Notes will initially be approximately $16.04, which represents a premium of 25% to the closing price of the Company’s common stock on November 14, 2024. The Company anticipates the net cash proceeds from the issuance of the Notes will be approximately $321.05 million, after subtracting fees, discounts, and ...
A convertible security is a financial instrument whose holder has the right to convert it into another security of the same issuer. Most convertible securities are convertible bonds or preferred stocks that pay regular interest and can be converted into shares of the issuer's common stock.
Take-Two Interactive is looking to expand its capital base by $250 million. This comes in the form of an issue of five-year convertible senior notes in an underwritten public flotation.
Senior debt is frequently issued in the form of senior notes or referred to as senior loans. Senior debt has greater seniority in the issuer's capital structure than subordinated debt . In the event the issuer goes bankrupt , senior debt theoretically must be repaid before other creditors receive any payment.
The notes, which carry a 0.625% interest rate, will be convertible into cash, shares of MicroStrategy's Class A common stock, or a combination of both, providing flexibility to noteholders.
Private placements may typically consist of offers of common stock or preferred stock or other forms of membership interests, warrants or promissory notes (including convertible promissory notes), bonds, and purchasers are often institutional investors such as banks, insurance companies or pension funds.
A reverse convertible security is a type of convertible security where a bond or short-term note can be converted to cash, debt or equity at a set date by the issuer based on an underlying stock. In effect it is a type of option on the maturity date where the bond can be converted to shares or cash.