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Introduction to Zero-Coupon Convertibles Zero-coupon convertibles are a unique hybrid of fixed income instruments that combine zero-coupons – bonds with no periodic interest payments – and convertibles, which offer bondholders the option to convert their debt into equity at a specified price. These securities offer investors intriguing benefits, as they
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Introduction to Hung Convertibles Hung convertibles are an intriguing subclass of convertible securities where the underlying common stock’s market price remains below the conversion price, making it highly improbable for these instruments to be converted into equity shares. As a result, they exhibit characteristics more similar to debt securities than
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What Is Dilution? Dilution refers to the decrease in existing shareholders’ ownership percentage following the issuance or creation of new shares by a company. It occurs when companies raise additional equity capital through secondary offerings, stock options for employees, or other optionable securities. As new shares are issued, each current
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