Convertible debt has long served nobly as the default form of financing for early-stage startups.
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In addition to the above mentioned benefits, founders avoid complex interest-rate arrangements that come with convertible debt.
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He pumped more money into the company in 2003 and 2004, also in the form of convertible debt.
The way most deals are arranged, investors get stock or convertible debt at a fixed price that is lower than the market price.
The terms of the agreement may be equity, debt, convertible debt, or any other securities structure that the entrepreneur and investor agree to.
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Then, in 2006, as it tried to mount a turnaround, Ford began a series of efforts to raise capital, including convertible debt offers and the issuance of new stock and warrants.
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For instance, Intel just recently issued non-convertible debt for the first time in nearly 25 years in order to repurchase stock and take advantage of the opportunity to capture value for shareholders.
EarthFirst, John Stanton's firm, claims to be at "the forefront of alternative energy sources, " according to its Web site, but still gets most of its revenue from moneylosing waste-disposal and biodiesel-import businesses, and recently filed to allow Laurus Capital to sell 76 million shares, whose proceeds would be used to retire convertible debt held by Laurus.
Ten years ago, an investor eager to play the two side by side had essentially one instrument: the convertible bond (debt switchable into equity).
Also Mr de Guindos is planning to provide this capital in the form of five-year debt convertible into shares rather than as pure shares - and would charge the banks interest at twice what the government has to pay to borrow for five years.
Alibaba said it financed the deal with a mixture of cash, senior debt and the issuance of convertible preference and ordinary shares.
In that case the debt-like features of a convertible note are much less attractive for an investor than traditional equity.
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The simple, entrepreneurial fix is a new mortgage product that would combine debt with equity, something like a convertible bond.
Remember: A convertible's price is based on its yield as a debt instrument as well as on its value as a stock in waiting.
Second, CHK is extending the average maturity schedule of its debt by replacing senior notes due to mature over the next six years with convertible preferred shares that come with no maturity date.
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