Conversion band
Also written threshold price, initial price, price band.
The two stock prices in a mandatory's terms: below the threshold the holder takes the stock's loss, above the initial price shares the gain, between them par.
Definition
The two stock prices written into a mandatory convertible's terms. Below the threshold price each preferred share converts into the maximum number of common shares, so the holder bears the stock's fall in full. Above the initial price it converts into the minimum number, so the holder keeps a set share of the gain. Between the two the number of shares is whatever is worth the liquidation value. The record draws the band with the stock's position; the Mandatory Conversion calculator works the payoff across it.
Definitions describe how YieldDesk reads the term. Nothing on this page is investment advice or a recommendation to buy, sell or hold.