Additional Terms and Issuance Pricing for Convertible Bonds

Abstract

In order to meet the capital requirements of investment projects, enterprises usually need a steady stream of funds, and issuing convertible bonds is a method often used by enterprises. Redemption clauses and resale clauses are additional terms of convertible bonds. In order to prevent over-investment, issuers can recover the bonds according to the redemption clauses. Investors can use the resale clauses to resell low-efficiency convertible bonds to enterprises To avoid capital loss. Therefore, this article will explore the relationship between additional terms and the pricing of convertible bond issuance to understand the effect of additional terms on the pricing of convertible bond issuance.