Reverse Convertible Note (RCN)
A synthetic instrument that behaves similar to both bonds and stocks, providing high coupon payments with final payoffs dependant upon the equity markets. Investopedia Says:
The RCN has a face value that matures as shares or cash upon the discretion of the issuer, and a fixed coupon rate based upon bonds. This allows investors to optimize the diversification of their portfolios without necessarily buying both types of products. Related Terms:
Bond
Convertible
Security
Synthetic |