Introduction to Convertible Bonds
James Eves
30 years: Equity capital markets
James provides an overview of convertible bonds in this video. He begins by outlining their structure before discussing both the advantages and disadvantages of using them.
James provides an overview of convertible bonds in this video. He begins by outlining their structure before discussing both the advantages and disadvantages of using them.
Introduction to Convertible Bonds
16 mins 13 secs
The convertible or 'equity linked' market is one of the most varied in terms of structures – from bonds that convert in shares at maturity, through to ones with conversion premiums as high as 70%. Convertible bonds have been used for decades but it was not until the development of option pricing models starting with Black and Scholes in 1973 that trading liquidity and the investor base really grew.
Key learning objectives:
Outline the structure of convertibles
Comprehend how volatility, options, and dividends are looked at by investors
Understand the advantages and disadvantages of convertibles and who invests in them
Learn about the different types of options and the delta of convertibles compared to the share price
James Eves
06:01
13:15
03:00
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