Convertible bonds offer lower borrowing costs and equity participation for companies.
Convertible bonds are a type of investment that allows bondholders to convert their bonds into company stocks. This gives investors the opportunity to benefit from the company's success without directly owning its stock. Companies issuing convertible bonds can enjoy lower borrowing costs compared to traditional debt. There are different types of convertible bonds, including zero-coupon bonds that are sold at a discount. Investors and market makers have different analytical requirements when dealing with convertible bonds.