Structured Yield Product Exchangeable For Stock - STRYPES

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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.

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RELATED FAQS
  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 >>
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    Mutual funds invest in stocks, but certain types also invest in government and corporate bonds. Stocks are subject to the ... Read Full Answer >>

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