CONVERSION RIGHTS

Some bonds are issued in convertible form which means they can be swapped for shares of the same company at a future date.

The holder of a convertible bond therefore has conversion rights. These may not be exercisable until a future date, or perhaps a series of future dates. Also the conversion will be done at a predetermined conversion ratio whereby a certain nominal value of a particular bond can be swapped for a specified number of shares at a set conversion price.