Convertible Bond Fund Basics
In financial terms, a convertible bond , also known as convertible note or convertible bond, is an instance of debt where the principal can convert into an agreed amount of stock or a specified fraction of gold in the issuer's portfolio. It's a hybrid financial product with equity-like characteristics and debt-like attributes. For example, it's valued using an asset valuation model. A convertible bond document usually has one or more derivatives, such as interest rates, callable funds, interest rate indexed swap contracts, or credit default swaps. Convertible bonds are issued by many different companies, both publicly and privately. Common types of convertible bond are bank notes, municipal, corporate, mortgage-backed securities, trust deeds, private placements, corporate securities, and proprietary bonds. These may be structured within the same company, or they may be issued as separate entities. Private placement bonds are company-related, while bank and trust deeds are