Convertible bond is a financial instrument, which has the option of transforming it into shares by the company who issued the same on the request of the owner. These are also known as convertible debentures. The convertible bonds include both the features of equity and debt. The coupon rate is less but the real advantage is its convertibility, at a premium, which is well above the share market value. The conversion ratio of the bonds depends on the issuer and it is pre-ascertained during the issue of the convertible bonds.
Convertible bonds are immensely popular in the global financial market. These financial instruments are beneficial to both the issuer and the customers. The price of these bonds differs from place to place.