Enter to open, tab to navigate, enter to select
Convertible securities
Practical Law ANZ Glossary w-005-8801 (Approx. 3 pages)
Glossary
Convertible securities
Securities, such as redeemable convertible preference shares, convertible loan notes or convertible bonds, that:
- Give the holder the right to receive interest periodically and repayment of the principal on maturity.
- Have the option to convert into ordinary shares or another class of securities in the issuing company according to a pre-arranged formula.
For the purposes of the Corporations Act 2001 (Cth) (CA 2001), securities are convertible into another class of securities if the holder may, by the exercise of rights attached to those securities, either:
- Have the other class of securities issued to them.
- Have the securities transform into securities of that other class.
An option may be a convertible security even if it is non‑renounceable.
(Section 9, CA 2001.)