Premium Adjustable Convertible Security - PEACS
Definition of 'Premium Adjustable Convertible Security - PEACS'A debt instrument that combines a coupon paying bond with the option to convert the bond into common stock at a set price. These are frequently described as hybrid securities because they combine features of debt and equity, converting to ordinary shares at a set date based on a pre-determined ratio. |
|
Investopedia explains 'Premium Adjustable Convertible Security - PEACS'Convertible securities like PEACS allow investors to acquire a debt instrument with rights to interest and principal payments without sacrificing the chance to participate in the company's capital appreciation. When a company does well, investors can convert the debenture into stock that has a higher value. When a company is less successful, investors can retain the bond and receive interest and principal payments. Convertible-bond mutual funds can provide a diversified investment in convertibles. These funds are meant to offer most of the upside potential of stocks while limiting downside risk. |
Related Definitions
Articles Of Interest
-
Convertible Bonds: An Introduction
Find out about the nuts and bolts, pros and cons of investing in bonds. -
What is the difference between convertible and reverse convertible bonds?
The difference between a regular convertible bond and a reverse convertible bond is the options attached to the bond. While a convertible bond gives the bondholder the right to convert the asset ... -
Where does the stock come from when convertible bonds are converted to stock?
First, let's define convertible bonds. A unique combination of debt and equity, they provide investors with the chance to convert a debt instrument into shares of the issuer's common stock, at ... -
Bond Basics Tutorial
Investing in bonds - What are they, and do they belong in your portfolio? -
Why Your Pension Plan Has Sovereign Debt In It
One type of security pensions tend to invest in is sovereign debt, or debt issued by a government. -
Women: Invest In Your Financial Literacy
Learning about money may seem intimidating, but it's not as hard as it looks. -
4 Behavioral Biases And How To Avoid Them
Here are four common common behavioral biases for traders and how to minimize their effects on your portoflio. -
Mutual Fund Ratings: Crucial or Insignificant?
Mutual fund ratings can help investors, but they have their drawbacks as well. -
Multi-Asset Funds Or Your Own Mix?
The underlying concept of mixed funds is very appealing. Discover if you're better off with professional management or creating a mixed fund of your own. -
6 Popular ETF Types For Your Portfolio
Exchange traded funds are an extremely popular diversification tool that can protect your portfolio during troubled periods.
Free Annual Reports