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With convertible bonds, you as an investor combine the advantages of classic bonds and shares. During the planable term, you collect fixed interest on your investment. At the same time, you benefit from a discounted share purchase price in the event of an IPO, sale of the company or the next major capital round. You do not have to invest any additional money. Your investment is automatically converted into shares with the advantageous conditions.
Singa is modernizing the last analog bastion of the entertainment industry by building the first truly digital streaming service for karaoke. Since 2015, Singa has expanded into 10 countries and grown to a team of 30.
With the convertible bond, Singa allows investors to benefit from the next capital increase, IPO or company sale at a 20% discount to the share price. Over the term of 34 months, investors receive 10% interest per year.
Naava's fully automatic products combine the intelligence of nature with modern technology and Scandinavian design. Naava offers the simplest and most advanced green solutions for workplaces, public spaces, homes and home offices.
With the convertible bond, Naava enabled investors to benefit from the next capital increase, IPO or company sale at a discount of 30% on the share price. The interest rate was 8% per annum. Investors in the convertible bond are now shareholders in the company.
Convertible bonds are hybrid securities that combine features of classic bonds (such as interest payments) with the option of the bonds being converted into shares at a later date. The contractual terms of the bond define how it is converted. For example, they specify the conditions under which the conversion takes place and the events that trigger an automated conversion. Upon conversion, you receive real shares. If conversion does not take place, your invested capital and accrued interest are repaid.
Conversion benefits for convertible bonds can be regulated by two conversion mechanisms: reduced share price or predetermined number of shares. The issuer specifies which mechanism applies in the contractual terms of the bond.
Reduced share price: the issuer may offer a reduction in the share price to which the bondholder is then entitled upon conversion of the bond (e.g. 25% reduction in the share price at the time of conversion).
Pre-determined number of shares: Another mechanism that the issuer may use is to allow the bondholder to receive a pre-determined number of shares for its bond(s) at the time of their conversion (e.g. each bond is converted into 10 shares).
The issuer has the option to redeem the convertible bond in the middle of its term. In this case, the issuer pays the investors all interest due, the investment amount and a penalty payment, which is specified in the terms and conditions of the bond.
No, with convertible bonds investors do not have any loss sharing or obligation to make additional contributions.
Yes. As the convertible bonds are securities, they are in principle transferable. However, the convertible bonds are currently not tradable on a stock exchange and there is currently no liquid secondary market.