Zero-Coupon Convertible

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Dictionary Says

Definition of 'Zero-Coupon Convertible'

A fixed income instrument that is a combination of a zero-coupon bond and a convertible bond. Due to the zero-coupon feature, the bond pays no interest and is issued at a discount to par value, while the convertible feature means that the bond is convertible into common stock of the issuer at a certain conversion price.
Investopedia Says

Investopedia explains 'Zero-Coupon Convertible'

The zero-coupon and convertible features offset each other in terms of the yield required by investors. Zero-coupon bonds are often the most volatile fixed-income investments because they have no periodic interest payments to mitigate the risk of holding them; as a result, investors demand a slightly higher yield to hold them. On the other hand, convertibles pay a lower yield compared to other bonds of the same maturity and quality because investors are willing to pay a premium for the convertible feature.
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'Zero-Coupon Convertible'

  • Where does the stock come from when convertible bonds are ...

    http://www.investopedia.com/ask/answers/06/stockfromconvertiblebondorigin.asp
    ... Here's an example from October 2003 found in Carnival Cruiselines' (NYSE:CCL) quarterly
    report: Carnival issued some zero-coupon convertible bonds that ...

  • Series 65 Study Guide - Cash Equivalents and Fixed Income ...

    http://www.investopedia.com/exam-guide/series-65/cash-equivalents-fixed/corporate-bonds.asp
    ... In the example above, the conversion ratio is 40. Conversion ratio = Par Value
    of Convertible Bond / Conversion Price. Zero-coupon Bonds: ...

  • Bear Market Rally Or Investment Opportunity?

    http://stocks.investopedia.com/stock-analysis/2009/Bear-Market-Rally-Or-Investment-Opportunity-ETFC-MEE-CIT-HAR0629.aspx
    ... also announced a debt exchange where holders of two of its bond issues maturing
    in 2011 and 2017, can trade them in for E*Trades zero coupon convertible bonds. ...

  • Credit Crisis Part 2?

    http://stocks.investopedia.com/stock-analysis/2010/Credit-Crisis-Part-2-F-UIS-ETFC-MCO0211.aspx
    ... Nasdaq:ETFC) also did a similar exchange in the summer of 2009 when it exchanged
    $1.7 billion of two issues of zero-coupon convertible debentures due in 2019 ...

  • Bond Basics: Different Types Of Bonds | Investopedia

    http://www.investopedia.com/university/bonds/bonds4.asp
    ... convertible bonds, which the holder can convert into stock, and callable bonds,
    which allow the company to redeem an issue prior to maturity. Zero-Coupon Bonds ...

  • 20 Investments: Zero-Coupon Securities | Investopedia

    http://www.investopedia.com/university/20_investments/20.asp
    20 Investments: Zero-Coupon Securities. ... What Is It? A zero-coupon security, or "stripped
    bond", is basically a regular coupon-paying bond without the coupons. ...

  • 20 Tools For Building Up Your Portfolio Slideshow | Investopedia

    http://www.investopedia.com/slide-show/investments-build-portfolio/convertible-securities.aspx
    ... Similar to convertible bonds, preferred stock takes up a middle ground between the
    risk and ... Zero-coupon bonds are bonds that have been stripped of their coupons ...

  • 13 Pre-Issue Corporate Bond Questions For Businesses

    http://www.investopedia.com/articles/bonds/09/corporate-bonds.asp
    ... bonds as an alternative form of financing, see Why Companies Issue Convertible Bonds.); ...
    to defer debt interest if possible, such as by issuing a zero-coupon bond ...

  • 20 Investments: Convertible Security | Investopedia

    http://www.investopedia.com/university/20_investments/6.asp
    20 Investments: Convertible Security. ... What Is It? A convertible, sometimes called
    a CV, is either a convertible bond or a preferred stock convertible. ...

  • 20 Investments: Conclusion | Investopedia

    http://www.investopedia.com/university/20_investments/21.asp
    ... You can exercise the convertible bond and exchange the bond into a ... A zero-coupon
    security, or "stripped bond", is basically a regular coupon-paying bond ...

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