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Cross-Currency Convertible Bond
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A convertible bond denominated and with coupons paid in one currency which is convertible into shares of a common stock denominated and traded in a second currency. Conversion terms are stated as the number of shares exchanged for each bond. Depending upon the relationship of the currencies at the bond's maturity, the bond may be converted even if the share price is unchanged or lower than the price at issuance. Alternately, the bond may be redeemed for cash in the denominated currency, if the share price rises while the shares' nominal currency declines.
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Glossary *
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