exchangeable bond


A hybrid security that combines a normal bond with an option to exchange the bond for shares of stock from a company other than the bond issuer. In the pricing of an exchangeable bond, the bond portion and the embedded option are valued separately, and the overall yield on an exchangeable bond is typically lower than that of a straight bond.
Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
exchange versus cash exchangeable debenture