What is a subordinated convertible bond?
A subordinated convertible bond is a type of bond that in the event of bankruptcy is repaid only after all other creditors have been repaid. Because of this increased risk, the issuer usually has to offer a higher interest rate than on ordinary convertible bonds.
This instrument combines the characteristics of subordinated debt with the ability to convert 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