What is a subordinated convertible bond?
A subordinated convertible bond is a type of bond that, in the event of bankruptcy, is only repaid after all other creditors have been repaid. Because of this increased risk, the issuing institution must generally offer a higher interest rate than on ordinary convertible bonds.
This instrument combines the characteristics of subordinated debt with the possibility of converting the bond into shares of the issuing company.
The term is relevant in the context of capital structure and investment strategies.
Version:
27/9/24