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ADAG had approached both WL Ross India (a private equity investor) as well as the … currencyconvertible bonds into equity, did not respond to a query. …

Market Stabilisation Scheme: Ceiling For Fiscal Year 2010-11

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MarketWatch
… real estate limited partnerships, convertible bonds and structured products. … CAM in Spain, Religare in India, and the Latin American partnerships …

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ADAG had approached both WL Ross India (a private equity investor) as well … 300 crore) worth of foreign currency convertible bonds (FCCBs) into equity, …
convertiblebonds.in – http://convertiblebonds.in/

Aabar’s $2 bln convertible bonds to be issued to IPIC | Reuters

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Livemint
It has been argued in India (including by this paper), … Further, if any revaluation drives down the Chinese purchase of US treasury bonds, …

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How To Decide If Convertible Bonds Are Right For You

Author: Jason Markum

Investing in the stock market is a lot of fun but takes a lot of work. We’re always looking for new and better ways to make money on the stock market and one way that many investors have found to get a quick bump in their portfolios is to invest in convertible bonds.

Whenever I talk to groups of investors I often discover that your average investor doesn’t know a whole lot about convertible bonds, and that’s ok. They know all about stocks, and they know all about bonds, but convertible bonds are a whole different beast.

So what are convertible bonds? Well basically they are what we like to refer to as hybrid securities. They usually carry a fixed interest rate just like a bond but in the future you may be able to exchange them for a specific amount of common stock in the underlying company that has issued the bond. So you get the best of both worlds, the steady and reliable income that a bond produces, and the upside potential for growth that a stock allows for.

Because that’s the problem with bonds, there is no upside growth potential. A bond is a contract. You agree to lend the company a certain amount of money and in exchange they agree to pay it back with a certain amount of interest over a certain fixed period. If next year the company comes out with a brand-new earth shattering product and their stock shoots through the roof, you don’t get any of that upside as a bond investor.

Convertible bonds fix that problem allowing you to take advantage of the fixed income opportunities that bonds give you and at the same time giving you the opportunity to take advantage of increases in stock price should something exciting happen to the company down the line.

One disadvantage that they do offer is that often times the interest that they pay will be slightly less than you would get if you owned a straight bond; but that’s merely the price you pay for the potentially unlimited upside that the convertibility offers.

Convertible bonds can often be a little difficult to understand because they use fairly complex pricing and many individual investors sometimes end up paying more than they should because they don’t understand the math involved. But then again, you are trying to get the best of both worlds so maybe that’s just the price you have to pay.

Also realize that a convertible bond is tied both to the bond market and the stock market. What that means is if the bond market drops and the stock market drops, your convertible bond may drop even more because it’s tied into both of those dropping markets. This can offer significant risk if you’re not careful.

Finally if you want to convert your bond in the stock, wait until after the next interest payment because interest payments are usually paid semiannually and do not accrue so you want to be sure to collect that interest before you convert the bond into a stock.

Hopefully now you know what you need to know in order to make a good decision about whether or not to purchase convertible bonds for your investment portfolio.

Article Source: http://www.articlesbase.com/investing-articles/how-to-decide-if-convertible-bonds-are-right-for-you-1850511.html

About the Author

Jason Markum has been writing articles online for almost 14 whole years. When not writing about investing, he enjoys running a 5.1 speakers web site where he reviews 5.1 computer speakers to make your computer hum.

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