Convertible Security
/kənˈvɚːrtəbəl sɛˈkjʊərɪz/
Definitions
- (n.) A financial instrument that can be converted into another form of security, typically common stock, under specified conditions.
The investor purchased a convertible security that could be exchanged for company shares after two years.
- (n.) A hybrid security combining features of both debt and equity to provide flexibility to investors and issuers.
Convertible securities provide companies with a way to raise capital while minimizing immediate dilution of equity.
Forms
- convertible security
- convertible securities
Related terms
See also
Commentary
Draft definitions should clarify that convertible securities bridge debt and equity, highlighting conversion terms and investor rights for precise legal understanding.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.