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A type of convertible bond issued in a currency different than the issuer's domestic currency. In other words, the money being raised by the issuing company is in the form of a foreign currency. A convertible bond is a mix between a debt and equity instrument. It acts like a bond by making regular coupon and principal payments, but these bonds also give the bondholder the option to convert the bond into stock.
These types of bonds are attractive to both investors and issuers. The investors receive the safety of guaranteed payments on the bond and are also able to take advantage of any large price appreciation in the company's stock. (Bondholders take advantage of this appreciation by means warrants attached to the bonds, which are activated when the price of the stock reaches a certain point.) Due to the equity side of the bond, which adds value, the coupon payments on the bond are lower for the company, thereby reducing its debt-financing costs.
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∙ 15y ago
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What would cause bond prices to fluctuate during the life of the bond?
Bonds are 'tied' to the money market. Fluctuations in currency exchange rates will alter the price of the bond.
How do you match a product with the type of market in which it is sold?
oil = commodity dollars = currency exchange market treasuries = bond market Corn and wheat-Commodity market Pesos and yen-Currency exchange market Munis and Treasuries-Bond market
How currency is liability to central bank?
The centeral bank is not allowed to just print money and go buy their morning coffee with it. They have to buy bonds if they want to inject money into the economy. When the bonds mature, they are repaid using currency. So the reserve bank looses an asset (the bond), and gets nothing in return (remember they can't go spend the currency that they just received in payement for the bond. The currency is just stored away, removed from the economy). In effect, outstanding currency means that the bank 'owes' somebody a bond, and they can come and claim that bond with their currency (obiously an oversimplification but you get the idea.) Many years ago money was a liability to the bank because it was redeemable for gold. Now it is redeemable for bonds.
What is the value of greenback currency?
A greenback bond was given to me. How much are they worth now? And how do I go about cashing or depositing it?
What is the relationship between bond prices and currency exchange rates?
The global markets are really just one big interconnected web. Bond price is inversely related to interest rates &there are many scenarios when using interest rates to predict currencies will Not work.
What do you mean by FCCB?
FCCB stands for Foreign Currency Convertible Bond. It is a type of bond that is issued in a currency different from the issuer's domestic currency and can be converted into the issuer's equity shares at a predetermined conversion price. FCCBs allow companies to raise funds from international markets and provide the potential for investors to participate in the company's growth.
What is a eurobond?
A eurobond is a bond issued in a currency foreign to the country of issue.
What is the difference between eurobonds and foreign exchange bonds?
A foreign bond has three characteristics: * The bond is either issued by a foreign entity (such as a government, municipality, or corporation). * The bond is traded on a foreign market. * and, The bond is denominated in a foreign currency. Foreign bonds are subject to currency risks, as when you hold the bond it is denominated in a foreign currency. As bonds take a specified time to mature, there is no guarentee of the return of the bond given the currency exchange fluctuations. A eurobond is a bond issued and traded in a country other than the one in which its currency is denominated. A eurobond does not necessarily have to originate or end up in Europe although most debt instruments of this type are issued by non-European entities to European investors. Meaning an entity can place a bond on the German exchange denominated in American dollars. Another difference is the composition of the underwriting syndicate. Eurobonds are underwritten by an international syndicate and is not subject to the rules and regulations of any country. Foreign bonds, however, are underwritten in the country of currency denomination, and are therefore subject to the regulations of that country.
Are all bonds convertible or are there special convertible bonds?
Not all bonds are convertible, in fact most are not. A convertible bond is a special bond with an option to exchange the bond for company stock under certain conditions.
What is cb bond?
Maybe a Convertible Bond.
Types of foreign bonds?
Its a Bond which means wherein a Home Country( say, India) deals with some Foreign Country ( say, Japan-Samurai Bond OR US- Yankee Bond OR UK- Bulldog Bond etc) in their own currency i.e Yen OR USD OR Pounds.
What is a convertible bond?
In finance, a convertible bond is a type of bond that can be converted into shares of stock in the issuing company, usually at some pre-announced ratio.
What is the difference between a convertible bond and a convertible debenture?
A convertible debenture is a type of convertible bond. However, a debenture is unsecured debt, which means that there is no collateral for the bond. The alternative to a debenture would be a secured bond such as a mortgage bond that would be secured by real estate. If the company goes out of business, the collateral for the secured bonds would be used to pay off those bonds and the holders of the debentures would be paid from whatever is leftover. Most convertible bonds are debentures.
What do you call a bond that can be changed into a specified number of shares of the issuers common stock?
Such a bond is an convertible bond.
Is your convertible debenture bond certificate worth anything?
yes
What is convertable bond?
In finance, a convertible bond is a type of bond that can be converted into shares of stock in the issuing company, usually at some pre-announced ratio.
What is Euro Convertible Bond?
A convertible bond is a bond that can be converted into a predetermined amount of the company's equity at certain times during its life, usually at the discretion of the bondholder. An Euro convertible bond is a bond issued by a company in a market other than its country of operation. Certain countries do not permit issue of ECBs by its companies since till the time of conversion the amount will add to the external debt of the country.
