| Convertibles, or convertible bonds, are bonds issued by companies that can be converted into ordinary shares or preference shares at a given price at a future date. They are a popular means of raising capital when interest rates are high, because the interest that the company has to pay on them is lower than on an unconvertible bond (the option to convert is deemed to be worth something to the holder). From an investor's point of view, convertible bonds can be attractive if the company's stock is volatile because they provide some of the security of a bond while at the same time allowing the investor to convert to shares if the company's stock rises.
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