usable bond

usable bond definition - business

usable bond

A bond that may be used at face value in combination with a warrant to purchase shares of common stock. Essentially, the issuer allows warrant owners to substitute the bond for cash when the warrants are exercised. Ownership of this type of bond is, like ownership of a convertible bond, a speculation on the direction of interest rates and also on the direction of the price of the underlying stock.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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