Reverse Convertible Note - RCN
What Does Reverse Convertible Note - RCN Mean?
A synthetic instrument that shares characteristics with both bonds and stocks. Reverse convertible notes provide high coupon payments and final payoffs that depend on the equity markets.
Investopedia explains Reverse Convertible Note - RCN
RCNs have a face value that matures as shares or cash upon the discretion of the issuer, and a fixed coupon rate based on bonds. This allows investors to optimize the diversification of their portfolios without necessarily buying both types of products.