Zero-coupon convertible bonds are no-interest bonds issued by a company that may be turned into that company's stock, should the share holder decide to convert the bond. |
Since zero-coupon convertibles are easily converted into stock, their price tends to follow the company's share price. But because their price offers the potential to appreciate with the firm's share price, they will usually offer lower yields that regular zero-coupon bonds.
Also called a "split coupon bond".
Related Words
