Structured Yield Product Exchangeable For Stock - STRYPES


DEFINITION of 'Structured Yield Product Exchangeable For Stock - STRYPES'

A type of convertible bond issued by companies that pays a quarterly cash coupon and can also be exchanged for a certain number of shares or receive the cash equivalent at maturity. STRYPES were created and trademarked by Merrill Lynch, and are traded on major exchanges.

BREAKING DOWN 'Structured Yield Product Exchangeable For Stock - STRYPES'

STRYPES were created to help sell the stock of a company that pays a low dividend. The yield paid on the STRYPES makes up for the low dividend yield until the investor converts the STRYPES into common shares.

Executives can also use STRYPES to gain cash periodically without significantly diluting a company's share value.

The features of the STRYPES allows high-risk companies to access investment capital that might otherwise be unattainable.

  1. Hybrid Security

    A security that combines two or more different financial instruments. ...
  2. Mandatory Convertible

    A type of convertible bond that has a required conversion or ...
  3. Convertible Bond

    A bond that can be converted into a predetermined amount of the ...
  4. Convertibles

    Securities, usually bonds or preferred shares, that can be converted ...
  5. Contingent Convertibles - CoCos

    A security similar to a traditional convertible bond in that ...
  6. Conversion Price

    The price per share at which a convertible security, such as ...
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  1. Do convertible bonds have voting rights?

    Convertible bonds usually have no voting rights until they are converted. Even after conversion, they may not be granted ... Read Full Answer >>
  2. 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 ... Read Full Answer >>
  3. What are 'death spiral' convertible bonds?

    Conventional convertible bonds give the bondholder the right to exchange the bond for a certain amount of the issuer's common ... Read Full Answer >>
  4. 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 ... Read Full Answer >>
  5. What is a convertible bond?

    A convertible bond is a bond issued by a corporation that, unlike a regular bond, gives the bondholder the option to trade ... Read Full Answer >>
  6. What are the risks of annuities in a recession?

    Annuities come in several forms, the two most common being fixed annuities and variable annuities. During a recession, variable ... Read Full Answer >>

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