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	Convertible Arbitrage (Site not responding. Last check: 2007-10-12)
		Convertible Bonds are bonds which offer the holder an option to convert the debt held into equity.
		The convertible bond will never trade below this value because while the value of the conversion option may drop if the underlying companies stock is struggling the investment value remains constant since the coupon on the bond is always being paid and the principal will be returned upon maturity, barring a default.
		The conversion value is the value of the bond were it to be converted into its equity equivalent, so if a convertible can be converted into 5 shares of stock and the stock price is currently $10 then the conversion value is $50.
	www.macroanalytics.com /html/convertible_arbitrage.html (621 words)

	Welcome to MAXAdvisor (Site not responding. Last check: 2007-10-12)
		Convertible securities are bascially bonds that come with a provision that allows the owner to convert them into stock in the underlying company.
		Owning a convertible bond portfolio could be described as a cost effective way to buy regular corporate bonds and taking some of the yield and buying stock options with them.
		Convertible funds are down around 12% this year so far, less than stocks, but far short of bonds.
	maxfunds.com /maxadvisor/favfunds/convertible.html (541 words)

	Froley, Revy Investment Company, Inc. - The Convertible Specialists (Site not responding. Last check: 2007-10-12)
		Convertible bonds and preferreds are fixed-income instruments that are exchangeable into a predetermined amount of an underlying common stock.
		Coupon rates for convertibles tend to be slightly less than their "straight" bond cousins, but investors are willing to accept the lower yield to take advantage of the potential upside gain in the common stock.
		Convertibles trading in the "mid-market" (75% - 130% of par) have, over time, captured approximately 2/3's of the stock upside and only participated in approximately 1/3 of the stock's downside.
	www.froleyrevy.com /convertibles.htm (416 words)

	The Convertible Bond (Site not responding. Last check: 2007-10-12)
		Convertible bonds give their holders an option to exchange each bond for a pre-specified number of shares of common stock of the company under certain conditions.
		Suppose a convertible bond that is issued at par value of $1,000 is convertible into 40 shares of a firm's stock, implying a conversion price of $25 per share.
		In the Western countries, convertible bonds tend to be issued by smaller and more speculative companies, because it is costly to assess their business risks and there are concerns that the company management may not act in the bondholders' interest.
	www.oycf.org /Perspectives/16_033102/convertible_bond.htm (2914 words)

	Convertible Bonds
		Convertible bonds tend to be issued by smaller, more speculative firms that find it difficult, because of risks inherent in their operations, to sell straight bonds or common stock at a reasonable cost.
		Convertible bonds, too, are typically subordinate debentures which means that their standing, in the event of default, is lower than that of any other of the company's debt or even its bank loans.
		If interest rates should decline significantly after the convertible bond is issued, most companies can and will call their bonds, in which case one loses the source of what had been a relatively attractive income, and must then reinvest the proceeds in another vehicle at the then lower rates of interest.
	www.dows.com /Publications/ConvertibleBonds.htm (675 words)

	Bond Categories
		For example, revenue bonds may be issued for the construction of a new hospital or the extension of sewer lines to a new housing development.
		A bond that is convertible into the common stock of a corporation at a prescribed price or ratio at the option of the holder.
		A bond that may originally have been issued as a general obligation or revenue bond but that is now secured by an "escrow fund" consisting entirely of direct US government obligations that are sufficient for paying the bondholders.
	www.russell.com /us/glossary/bonds/bond_categories.htm (666 words)

	Convertible Bonds
		Convertible bonds are bonds issued by a company that are convertible into common stock.
		Many convertible bonds are offered by small and medium-sized companies which allow investors a slightly safer approach to getting into the small and mid-cap sectors.
		Bonds are referred to as debt because the money is leant to the company by the bondholder and the company has the obligation to pay them back plus interest.
	www.teenanalyst.com /bonds/convertibles.html (636 words)

	The Convertible Craze Brightens The Future Of Equities
		A convertible bond is issued at a strike price, 25 to 40 percent higher than the market price of the general stock issued by the company.
		These are: the interest rate and yield of the bond, the number of years prior to maturity, the common stock price during conversion of the bond, the features of the bond that make it different from a usual bond, the negative aspects of the bond, and the benefits while converting to a common stock.
		There are two reasons for this: the interest on convertible bonds is paid before any stock dividends, and, if the company suffers a loss, the investors of convertible bonds have an upper hand over the investors of stocks while claiming the money.
	www.rncos.com /sample7.htm (782 words)

	Giddy - Convertible Bonds and Other Convertible Securities (Site not responding. Last check: 2007-10-12)
		Since most convertible bonds are also callable, the company can force the bond holders to convert the bonds to common stock by calling the bonds.
		The upside of the convertible comes from its common stock component, while the downside protection comes from the cash coupon, fixed maturity, and status in the capital structure which is senior to common and preferred stock.
		Low breakeven convertibles typically have the most equity sensitivity, and given the yield advantage, it is not unusual for a convertible with this characteristic to outperform the common on a total return basis.
	pages.stern.nyu.edu /~igiddy/convertibles.htm (1409 words)

	Convertible Bond Fund
		Our objective for the Convertible Fund is to earn 80% of the long term returns of the stock market averages with about half of the downside risk during prolonged bear markets.
		Convertibles funds generally invest the majority of their assets in convertible bonds, followed by a smaller stake in convertible preferred stock, as well as sprinklings of common stock and traditional bonds.
		Convertibles gained 4.7 percent annually between 1998 and 2002 vs. a loss of 0.6 percent for the SandP 500, while carrying about the same risk, reports Ibbotson Associates, the Chicago investment research firm.
	members.cox.net /richardschultzcfp/convertible_fund.htm (253 words)

	Convertible bond - Wikipedia, the free encyclopedia
		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.
		From a valuation perspective, a convertible bond consists of two assets: a bond and a warrant.
		A simple method for calculating the value of a convertible involves calculating the present value of future interest and principal payments at the cost of debt and adds the present value of the warrant.
	en.wikipedia.org /wiki/Convertible_bond (371 words)

	:: Quantnotes.com :: Fundamentals ::
		A convertible bond is a security issued by a company that may be converted from debt to equity (and vice-versa) at various prices and stages in the life cycle of the contract (for example, the time to maturity).
		Since a convertible bond is a liability of the issuer, if the company goes into liquidation the convertible bond holder has priority over most other parties except pure bond holders.
		Moreover, given that the convertible is effectively a bond plus a warrant on the stock, the price of a convertible must be comparable to the sum of the two individual components.
	www.quantnotes.com /fundamentals/bonds/convertibles.htm (768 words)

	Convertible bond issues lift hedge funds (Site not responding. Last check: 2007-10-12)
		Convertible bonds are bonds that can be turned into stocks at a specific price.
		Convertibles are a popular way for companies to raise money to fund acquisitions because other investors' shareholdings aren't immediately diluted by the issuance of new stock, and the convertible securities can be brought to market quickly.
		Among the big acquisition-related bonds this year was German chemical giant Bayer's 2 billion euros ($2.47 billion) convertible bond in March to help fund its planned acquisition of rival Schering.
	www.post-gazette.com /pg/06114/684704-28.stm (719 words)

	convertible bond Definition
		A corporate bond, usually a junior debenture, that can be exchanged, at the option of the holder, for a specific number of shares of the company's preferred stock or common stock.
		First and foremost, convertible bonds tend to have lower interest rates than non-convertibles because they also accrue value as the price of the underlying stock rises.
		Convertibles earn interest even when the stock is trading down or sideways, but when the stock prices rise, the value of the convertible increases.
	www.investorwords.com /1110/convertible_bond.html (344 words)

	Eurekahedge - Convertible Bond Arbitrage
		It is helpful to think of convertible bonds as consisting of two components: a traditional ("straight") bond that pays a regular coupon and an equity call option on the underlying stock.
		Convertible bond investors are willing to receive lower coupon payments because convertibles contain imbedded equity call options that allow investors to convert the bonds into shares if share prices rise.
		The minimum value of a convertible bond is the "investment value" of its bond component, which is the present value of future coupon payments and principal repayment from the bond.
	www.eurekahedge.com /news/03jul_archive_cba.asp (1190 words)

	Convertible Bonds (Site not responding. Last check: 2007-10-12)
		If the normal bonds of Ensolvint were trading at 10% yields and the yield of the convertible was 10%, bond investors would buy the bond and keep it at $100.
		A convertible bond with an "exercise price" far higher than the market price of the stock is called a "busted convertible" and generally trades at its bond value, although the yield is usually a little higher due to its lower or "subordinate" credit status.
		Investors buy convertible bonds to gain a higher current yield and less downside, since the convertible should trade to it bond value in the case of a steep drop in the common share price.
	www.finpipe.com /bndcnvrt.htm (546 words)

	Convertible bond funds past peak? - The Washington Times: Business (Site not responding. Last check: 2007-10-12)
		Convertible bonds give investors steady interest income and also an option to trade in the securities for a set number of shares if the issuing company's stock rises to a specified price, allowing investors to cash in on any stock rallies.
		Convertible bond funds in the last year outperformed the average domestic stock fund, returning 18.1 percent compared with 14.4 percent for stock funds.
		Indeed, while convertible bond funds have outperformed stock funds in recent years, they lagged for the year to date through July as Wall Street staged a comeback, with returns of 13.4 percent compared with stock funds' 15 percent.
	www.washingtontimes.com /business/20030807-100847-5367r.htm (605 words)

	TheStreet.com: Convertible Bond Funds: Limit the Upside, but Buffer the Downside
		Convertible bonds, which offer some of the upside of stocks together with some of the stability of bonds, have become increasingly popular vehicles for raising capital by corporations, giving funds that specialize in them more and more investment choices.
		Bond funds have a much-lower expense ratio of 1.10%, on average.
		Take, as an example, a $1,000 convertible bond with a 5% yield where the stock was originally trading at $80 and the premium conversion rate was set at $100.
	www.thestreet.com /funds/funds/1457524.html (1152 words)

	Convertible Bonds: Primer by Izzy Nelken
		Essentially, convertible bonds (or simply "convertibles" or even "converts") are bonds that, at the holder's option, are convertible into a specified number of shares.
		When the share is in the range between $90 and $110, the bond is in the "hybrid region" and the impact of stock price movements on the price of the convertible is much more subtle.
		They may be long the convertible bond and short the corresponding equity or vice-versa.
	www.fenews.com /fen1/convertiblebonds.html (1174 words)

	Amazon.com: Pricing Convertible Bonds: Books: Kevin B. Connolly (Site not responding. Last check: 2007-10-12)
		Convertible bonds and warrants are usually mentioned as an after thought in the latter chapters.
		Convertible bonds are a hybrid of bond and equity.
		Once the individual investor begins to grasp the complexity of convertible bonds, it beats me as to why he or she would not be inclined to give up the entire enterprise altogether.
	www.amazon.com /Pricing-Convertible-Bonds-Kevin-Connolly/dp/0471978728 (1951 words)

	Profit from flexibility: convertible bond funds offer many of the pluses of stock portfolios with less risk - Mutual ... (Site not responding. Last check: 2007-10-12)
		Essentially, convertibles are fixed-income investments that companies issue, which offer the comforting income of a bond, but can also be exchanged for shares of company stock should an investor wish to capitalize on a strong stock market.
		Typically, convertibles are meant to offer some, but not all, of the upside of the stock market while cushioning portfolios during periods when stocks drop in value.
		Morningstar stats also show that convertible bond funds are generally more expensive, averaging 1.5% of their assets in expenses, compared to 1.3% for the average large-cap blend fund.
	www.findarticles.com /p/articles/mi_m1365/is_2_34/ai_107277790 (490 words)

	Value Line
		When a company issues convertible debt, it doesn't have to pay as much interest because there is a possibility that investors will be able to convert the bond into shares of stock.
		That said, some preferred stocks are convertible, which increases access to small investors, but even in the preferred realm, it is difficult to find convertible preferred stocks that can be purchased by anyone other than an accredited investor.
		Moreover, the credit ratings of convertible securities are generally lower than the rating of a company's conventional debt because convertibles are usually subordinated to normal debt.
	www.valueline.com /news/fund060801ssy.html (1318 words)

	USATODAY.com - Convertible bonds could get you moving (Site not responding. Last check: 2007-10-12)
		Bonds fall in value when interest rates rise, and the yield on the bellwether 10-year Treasury bond has soared from 3.11% in June 2003 to 4.48% now.
		Convertible bonds are a hybrid investment that have produced some decidedly decent returns.
		Traders then look at the convertible as a bond, rather than a stock, and bonds are less volatile than stocks.
	www.usatoday.com /money/perfi/columnist/waggon/2004-07-15-invest_x.htm (891 words)

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