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Definition of 'Senior Convertible Note'
A debt security that contains an option where the note will be converted into a predefined amount of the issuer's shares. A senior convertible note has priority over all other debt securities issued by the same organization.
Since the bondholder receives two benefits not found on a normal bond issue (a call option and first priority for recourse in the event that the issuer goes bankrupt), the amount of interest offered to the bondholder will tend to be lower than on any other bond offered by the same issuer.
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Investopedia explains 'Senior Convertible Note'
The worst-case scenario would be if the issuing company initially performed well, meaning that the debt would be converted into shares, and subsequently went bankrupt. The converted shares would become worthless, but the holder of the note would no longer have any recourse.
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Search results for 'Senior Convertible Note'
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http://stocks.investopedia.com/stock-analysis/2009/Are-Investors-Too-Concerned-With-Dilution-EK-PALM0921.aspx
... LP Kohlberg agreed to buy up to $400 million in senior secured notes due ... placed another
$400 million with institutional investors in a convertible note due in ...
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http://stocks.investopedia.com/stock-analysis/2008/Can_Harman_Reach_The_High_Note_HARGSBBY.aspx
... Can Harman Reach The High Note? ... would likely fight, Harman International got them
to buy $400 million in 1.25% Senior Notes, convertible into Harman ...
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http://stocks.investopedia.com/stock-analysis/2009/Further-Signs-Of-Credit-Recovery-URI-MCO-BZH-LMT-RTN1117.aspx
... notes and convertible debt, and will use part of the proceeds to redeem some of
its high cost debt that carries a coupon of 14%. The new senior note issue has ...
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http://www.investopedia.com/articles/stocks/11/dangers-of-stock-dilution.asp
... Note the 6,000 shares is the number of shares ... see Getting The Real Earnings, or
Convertible Bonds: An ... Matt Cavallaro. Matt Cavallaro is Senior Equity Analyst ...
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