Convertibles Bonds.

anyone?

Yes I believe so...give it more than 15 minutes dude lol

yes they are, 100 pct

Yes, but they trade higher than straight bonds, and help the issuer get some equity credit to help the yield when they issue debt in the future. Think of it as a bond that has an option attached.

Of course. Bond ratings depend on credit risk and not whether it's convertible or not.

Yes, convertible notes have same type of rating as bonds. Mandatories may not... someone else can confirm this.

Mandatories are preferred securities unless you're talking about the unit & TEU structures, so they're treated as equity. Only question is whether it's treated as common/preferred equity and whether the debt piece is junior sub or has a senior slice. I don't see them with ratings generally.

For convertible bonds, it's not necessary for them to get debt ratings like straight debt, and as a result most convertibles will not have ratings on them.

Yeah I haven't seen a rating attached to anything but notes.

I'm not sure you guys get the fact that while straight debt does need to be rated, convertible debt does not....but whatever, not my problem.

Even if it is not necessary to rate convertibles, surely it makes sense to do it anyway considering that a lot of funds have mandates which specifically require a rating?

Nope. Most convert investors could care less. Issuers don't want to go through the hassle, and the investor market that invests in converts don't require ratings, bc otherwise they would be blocked off more than 50% of what's in the market.

One of the biggest benefits of issuing a convert over debt (besides the obvious financial incentives) is circumventing ratings.

In that case, how do Convertible Funds relay the amount of risk they're taking to investors? Or do the majority of investors in such funds simply not care about risk, but just the historical (and obviously future) returns?