Set out the key characteristics of a convertible bond

A convertible bond gives the holder the right to exchange it for a fixed number of the issuer's shares, the conversion ratio, during a conversion period. The conversion price is the face value divided by the conversion ratio. Terms usually adjust the ratio for splits and special dividends, and may include a change-of-control put, letting holders sell the bond back if control of the issuer changes. Many convertibles are callable, often after a period of call protection, and issuers typically call once conversion value is well above the call price, to force holders to convert. Exchangeable bonds convert into shares of another company; mandatory and contingent convertibles convert automatically. When called, compare the call price with conversion value and take the higher.