DEFINITION of 'Irredeemable Convertible Unsecured Loan Stock - ICULS'
A type of security that can be used to purchase underlying common shares. It is similar to a warrant except that it is subject to the conversion ratio. In essence, an ICULS provides the benefits of a bond until it is converted to an equity.
BREAKING DOWN 'Irredeemable Convertible Unsecured Loan Stock - ICULS'
ICULS pays a coupon to the holder every six months at a predetermined rate. The ICULS can be converted to equities at any time up to the expiration date, but if it is not converted by then, it will expire and be worthless. Because an ICULS is based on a conversion to common shares, its price is determined by the conversion ratio. For example, if the conversion ratio is 5:1 (five ICULSs for each common share) and the price of the common share is $20, the price of the ICULS will be $4.