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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.
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.
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.
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.
The company announced that it intends to float an issue of convertible senior notes in a private offering to qualified institutional buyers. Up to $1 billion in principal amount will be.
The Company also intends to use approximately $18.0 million of the net proceeds from the offering of the notes to pay the cost of certain convertible note hedge transactions (described below ...
Seniority can refer to either debt or preferred stock. Senior debt must be repaid before subordinated (or junior) debt is repaid. [1] Each security, either debt or equity, that a company issues has a specific seniority or ranking. Bonds that have the same seniority in a company's capital structure are described as being pari passu.
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.