Convertible Reset Debenture

A convertible bond with a required upward interest rate adjustment, typically effective several years after issuance. The issuer may be required to reset the coupon high enough to give the debentures a market value at least equal to their face or par value. The purpose of the reset is to compensate the bond holder for any credit deterioration. The reset will frequently encourage the issuer to refinance or, perhaps, force conversion. Compare with Callable Step-Up Note.

Glossary * C