JONATHAN L. HORNE
Executive Vice PresidentPacific Investment Management Company
CHRIS P. DIALYNASManaging DirectorPacific Investment Management Company
A convertible bond is a debt security that allows the holder to convert to a given number of shares of a company’s equity. This convertibility to equity means that the holder of a convertible bond will profit from a significant increase in the firm’s stock price while being protected against lower stock prices through his debt claim. In this chapter we will first discuss some key terms and the basic features of convertible bonds, and then describe the motivations for issuing these securities and the key portfolio management ...