Convertible Bond Adjustment Calculations

Convertible Bond Adjustment Calculations

In the first of this two part series, Mark uses his experience as a calculation agent to provide insight into how the role helps both issuers and investors to understand how calculations impact them. He delves into adjusting the conversion price when an issuer has convertible bonds outstanding and is due to pay a dividend, as well as dealing with cash settlement conversions.
Overview

The calculation agent is responsible for carrying out the calculations set out in the terms and conditions of the transactions. The role of a calculation agent is to be able to help the issuers and investors understand how those calculations affect them.

Key learning objectives:

  • How does a Calculation Agent help its clients?

  • How does an issuer settle convertible bonds after the investor converts it?

  • What is Net Share Settlement?

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Summary
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Expert
Mark Dalton

Mark Dalton

Mark Dalton was an investment banker for 15 years, starting out in Toronto working for BMO Capital Markets, before moving to London to do a Masters in Finance at London Business School. He then spent 11 years at UBS, where he was involved in structuring, documenting, and executing tens of billions of convertible bond and strategic equity derivatives transactions. Currently, Mark is the Managing Director and Founder of ConvEx, a leading independent calculation agent in EMEA.

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