A bond that carries fixed coupon (interest payment) and the right (embodied in a warrant) entitling the bearer of the bond, after the passage of a specific period of time, to purchase specific number of shares in the issuing company (a joint-stock company) at a preset price (a predetermined exercise price). A warrant-linked bond is a fixed-interest bond combined with an attached warrant. The issuer of the warrant (on its stock) is the same company issuing the underlying bond.
A bondholder, equipped with the right to exercise on an issuer’s stock (the warrant), can buy a specific number of common shares of the issuer under terms and conditions set out in the bond issuance plan. The warrant and the bond can be traded or exercised separately.
This bond is also known as a warrant-linked bond.
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