Convertible Bonds – an Overview


Since 2009, approximately 10 issuances of convertible bonds (“CBs” or “bonds”) have been made by Hong Kong-listed companies. CBs are useful financing tools for companies, especially for small- to mid-sized fast-growing companies. This article provides brief guidance in relation to CBs.


A CB is a hybrid security with both equity and debt features. The bondholder can convert the bonds into shares of the issuer at any time or wait until maturity and receive cash at the principal amount. If the CB is issued with a coupon, bondholders can also enjoy interest payments throughout the life of the bond. Alternatively, if the bondholder elects to convert the CB into shares, then the holder will be entitled to dividends with respect to the shares. The price of a CB is closely linked to the share price of the issuer; however, volatility is typically lower than that of the underlying shares because of the debt feature.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP | Attorney Advertising

Written by:


Morrison & Foerster LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.