Question

All else equal, which would be LEAST preferable from a bond ISSUER's viewpoint? A convertible bond....

All else equal, which would be LEAST preferable from a bond ISSUER's viewpoint?

A convertible bond.

A bond with a contingency provision.

A putable bond.

A callable bond.

All of the bonds given would be equally preferable from the issuer's viewpoint.

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Answer #1

Convertible Bond is a Bond that will be converted into Equity at some future date.

Bond with a continency provision is a Bond that provide issuer or the holder, some right under some condition.

Putable Bond can be CANCELLED BY THE HOLDER at anytime.

Callable Bond can be CANCELLED BY THE ISSUER at anytime.

Bond Holder will put the bond, if Yield is more than Coupon. Therefore, that will be a loss to the issuer. Therefore, Issuer will not prefer that. all other options will be okay to issuer.

Therefore, A Putable Bond

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