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." |
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Investopedia explains '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. |
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