CB Low-Rate Loan Debate Grows as 100% Call Options Become Common

According to Hankyung, the convertible bond market is showing a stronger pattern in which issuers raise funds at low cost. A CB is a bond with the right to convert into shares, but recent structures highlight conditions that favor issuers' financing needs more than investor returns. In particular, terms allowing issuers to attach a 100% call option, or the right to buy back the CB, have been cited as becoming mainstream. This is tied to criticism that CBs are being distorted into low-interest loan tools. The market is watching how such terms may affect the balance of interests between investors and issuers. Source: hankyung.com