Forced conversion - Mainly applies to convertible securities. Occurs when a convertible security is called in by the issuer, usually when the underlying stock is selling well above the conversion price. Thus, they assure the bonds will be retired without requiring any cash payment. Upon conversion into common, the carrying value of the bonds becomes part of a corporations equity, thus strengthening the balance sheet and enhancing future debt issuing capability.
Forced conversion : mainly applies to convertible securities. occurs when a convertible security is called in by the issuer, usually when the underlying stock is selling well above the conversion price. thus, they assure the bonds will be retired without requiring any cash payment. upon conversion into common, the carrying value of the bonds becomes part of a corporations equity, thus strengthening the balance sheet and enhancing future debt issuing capability.
Forced conversion