Striking gold or pitfalls in bond prospectuses

convertible bonds

The idea that prospectus risks could be viewed as a stand-alone discipline in the convertible bond (CB) market was pioneered in 2001 by Guernsey's prospectusanalysis.com, which published a list of 160 such risks.

The rationale for prospectusanalysis.com was that CB hedge funds could hedge equity risk, interest rates, and credit default risk but not prospectus risk. It simply didn't fit into the binomial models, but frequently was critical to the profitability of a trade. Its database has bee

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