Mayer Brown has extensive experience advising issuers and underwriters around the world on convertible bond offerings. Convertible bonds are typically fixed-rate bonds issued by a company, the terms of which allow the holders of the bonds to convert them into ordinary shares of the company at a prescribed conversion price and during a prescribed conversion period.
Convertible bonds can therefore be seen as a combination of two separate financial instruments:
- A fixed-rate bond
- An embedded equity call option