One useful tool: convertible notes that turn into equity upon a startup's next valuation.
Over the next few weeks a lot of tax-oriented money will be going into equity exchange-traded funds.
Investors have also taken on additional risks and ventured into equity markets, resulting in rallies for indices across the world.
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The melt-up into equities will continue as long as investor cash exits bond funds and U.S. Treasuries, and flow into equity mutual funds.
Holders of the lowest layers of debt in bailed-out banks are likely to see their debt converted into equity and to take losses.
But neither has been able to make a big breakthrough into equity underwriting, the investment-banking business that separates the best from the rest.
Ten years ago, an investor eager to play the two side by side had essentially one instrument: the convertible bond (debt switchable into equity).
Since for a long time their shares seemed only to go up, most firms must have assumed that their convertibles would be converted into equity.
That made the likelihood of being able to convert debt into equity increasingly remote, and gave bondholders less reason to hang on to their bonds.
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These bonds will convert into equity when financial distress becomes substantial or forces banks to issue equity to pay back the bonds to prevent the dilution.
If corporate bondholders convert their debt into equity as part of a restructuring, they then have the power that equity ownership confers: They could demand new management.
The company did not specify what interest rate it would pay on the loan nor whether Merrill would have the opportunity to convert any of it into equity.
Though the order book is thin and the workforce is due to fall to half its 1998 number, management is asking Jakarta to convert its debt into equity.
One is through the wider use of convertible bonds which automatically switch into equity, bolstering the bank's balance-sheet if, for instance, its capital ratio falls below a trigger threshold.
With the strike price of the option set a long way above prevailing levels, they will have reckoned they could convert the debt into equity at ever giddier prices.
Furthermore, although money flows into equity funds have improved this year, bond funds are still enjoying inflows, a reflection of how investors have not fully rekindled their love with stocks.
Micron raises the money to do this by issuing equity (or more typically, bonds convertible into equity) to add to its cash in the bank and profits from ongoing operations.
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Flows of new money into equity funds have slowed somewhat, as investors who are fully invested in stocks have begun to shift a healthy slice of their portfolios into cash.
Retail flows into equity funds were positive for the fourth week running, keeping them on course for the strongest start to a year since the beginning of 2006, fund tracking firm EPFR Global said Friday.
In Britain, Switzerland and the European Union rules are either now in force or being drafted that will force banks to ensure that at least some of their debt can be turned into equity in a crisis.
The idea that converting a small portion of deposits into equity claims in an economy with a population of barely more than 1 million could be a source of systemic risk suggests the hair-trigger character of the current situation.
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Analysts said though foreign inflows into equity markets might further strengthen the local currency against the greenback, some lingering political risk could weigh on the value of the ringgit as Mr. Anwar, the opposition leader, has disputed the election results.
Now you can convert, like we do for corporate restructuring, some of that debt into equity if you reduce the face value and then you make the creditor effectively a shareholder in the house by giving them the upside to warrants.
And for some of you who are underwater, you might say, instead of spending that money I can plow that back into equity in my home, and build that back up, which would further strengthen housing prices here in Nevada and around the country.
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The Basel club of regulators proposes to do just that by taking a type of debt at the bottom of the pecking order (known, confusingly, as Tier 2 capital), and giving supervisors power to write it off or convert it into equity without triggering a default if a bank is in serious trouble.
It would be selling the bonds and buying the stocks because what's happened to the extent that you have bonds in your portfolio, interest rates are at rock bottom, which means that bond prices are up, the funds have done very, very well, so take some money out of the bond funds and put them into equity funds.
Flows into EM equity funds have outpaced those into developed market funds since 2007 with two major interruptions at the height of the global financial crisis and the European crisis.
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It was explained to me that investors wanted instead to put billions into private equity.
When I was a management consultant at Bain, several of my colleagues switched into private equity.
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Following the success of this venture, Discover is also looking to branch out into home equity loans.
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