Overview
This tutorial is an introduction to convertibles, the associated terms and provision and variants. It also introduces the key features of contingent convertibles (Cocos) and the related regulatory issues. The last part of the tutorial outlines how convertibles are priced and the factors that influence their prices.
Objective
On completion of this tutorial, you will be able to:
-Define a convertible bond
-Explain the mathematical terms associated with convertibles
-Outline the special provisions that can be included in the terms of a convertible
-List and describe the different convertible variants
-Describe the key features of contingent convertible (Coco) bonds, including 'trigger' points and pricing mechanisms
-Outline the key regulatory issues associated with CoCos
-Understand the factors that affect convertible prices
-Outline the basic concepts in the valuation of convertible bonds
Content Highlight
Module 1: Convertibles - An Introduction
Topic 1: What is a Convertible?
Topic 2: Mathematics of Convertibles
Topic 3: Provisions of Convertible Bonds
Topic 4: Convertible Bond Variations
Module 2: Contingent Convertibles (CoCos)
Topic 1: CoCo Fundamentals
Topic 2: Regulatory Issues
Module 3: Convertibles - Introduction to Convertible Valuation
Topic 1: Factors that influence the Price of a Convertible
Topic 2: Valuation of a Convertible
Topic 3: Convertible Price Sensitivity: Parity Delta and Gamma