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Step-Up Income Redeemable Equity Note (SIREN)
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A variation on the traditional convertible bond with a coupon rate that rises to a higher level-typically on the bond's first call date. The appeal of SIRENs lies in their ability to provide higher income in an environment where, because of rising rates, the underlying equity may not have risen enough to give the conversion feature appreciable value. In return for the higher coupon, the issuer gets easier call terms to permit refinancing if market rates drop.
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Glossary *
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