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Back to basics

We take you back to the credit basics to review everything you thought you already knew but were too afraid to ask... Christopher Davenport of Citigroup's convertible bonds group in London explains the basics of convertible bonds

What are convertibles?

As with other bonds convertibles typically pay coupons and carry the promise of cash redemption at maturity. A convertible differs from straight debt in that the holder has the right to exchange the bond, usually at any time, for a certain number of the issuing company's ordinary shares, without any extra payment.

Call features are commonplace in European convertibles. They

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