Compulsory Convertible Debenture (CCD)
Contents
Unraveling the Mystery of Compulsory Convertible Debentures (CCDs)
Understanding Compulsory Convertible Debentures
Delve into the world of compulsory convertible debentures (CCDs) and grasp the intricacies of this hybrid financial instrument. Learn how CCDs bridge the gap between bonds and stocks, offering unique advantages for both companies and investors.
Exploring Convertible Debentures
Discover the two forms of debentures – non-convertible and convertible – and understand how CCDs fall into the latter category. Gain insights into the benefits and features of convertible debentures, including the potential for equity conversion and lower interest rates.
Key Features and Benefits
Uncover the key takeaways of CCDs for both issuers and investors. Learn how compulsory conversion enables companies to repay debts without cash outflow, while offering investors the opportunity for interest returns and future ownership of company shares.
Understanding Conversion Ratios
Explore the concept of conversion ratios and their significance in CCDs. Understand how conversion ratios are determined and expressed, shaping the relationship between debentures and equity shares.
Trading Dynamics of CCDs
Dive into the trading dynamics of CCDs and understand their classification as equity-like instruments with debt-like structures. Explore the implications of put options for investors and the risk mitigation aspects of CCDs for issuing companies.