Harmless Warrant


DEFINITION of 'Harmless Warrant'

A warrant that requires the holder to surrender a similar bond when purchasing a new fixed-income instrument. For the warrant to be exercisable, the two bonds must have similar terms, such as maturity, yield and principal.

Also known as a "wedding warrant."

BREAKING DOWN 'Harmless Warrant'

Issuing a harmless warrant provides the debt issuer with some call protection. Under a normal warrant, bond holders might all opt to buy more instruments, drastically increasing the firm's level of debt. With a harmless warrant, the original bond must be surrendered at the time of purchase, allowing the level of debt to remain constant.

  1. Wedding Warrant

    A warrant that can only be exercised if the host asset, typically ...
  2. Call Protection

    A protective provision of a callable security prohibiting the ...
  3. Call Warrant

    A financial instrument that gives the holder the right to buy ...
  4. Warrant Coverage

    An agreement between a company and its shareholders whereby the ...
  5. Warrant

    A derivative security that gives the holder the right to purchase ...
  6. Warrant Premium

    The amount that an investor must pay above the current market ...
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