Convertible Corporate Debt
Convertible debt instruments were once the province of startups and micro-capitalized entities that were not yet poised to do greater public offerings of their equity.
Since the beginning of the technology boom, they have emerged as a powerful hybrid alternative to direct equity or debt offerings. To serve this market, Central State Financial LTD has assembled a team of experienced convertible corporate debt consultants that focus their efforts on developing bespoke custom solutions for corporate clients that want the benefits of traditional equity offerings without ceding immediate ownership or control of corporate management.
Our consultants create convertible debt solutions across the range of possible alternatives, from exempt private transactions through fully registered convertible debt securities that include direct conversion mechanisms or that have warrants that a holder may exercise upon occurrence of certain conditions. Our services extend into all international capital markets. We support convertible debt offerings both as a sole source advisor and as a lead or participating member of syndicated offerings.
The Central State Financial LTD Approach to Convertible Debt
Central State Financial LTD advisors begin every financing engagement with fundamental credit research and analytical modeling of the client’s operations and the competing operations of other participants in the client’s industry sector. We review economic and market conditions to determine the most favorable terms and conditions that may be available for the client’s convertible debt offering. Our recommended solutions never follow the same format or structure, but are developed to coincide with the client’s business structure and operations and to deliver the most favorable financing solution to the client.
We specifically balance several critical factors when we are proposing a convertible debt solution:
- what risks and rewards will the client realize under several “what if’ scenarios of rising or falling equity prices
- can convertibility options be adjusted as a function of corporate, industry, market, and general economic conditions
- do our proprietary big data modeling tools provide the correct value for convertible debt in view of market factors and political and economic conditions
- does our fundamental analysis stand up to volatility in credit and equity markets
Our international affiliations and our presence in all major global financial markets provide unique insights into the demand for convertible debt instruments. We understand the diversity of demand in those markets and we adjust our recommendations to reflect that diversity. Our recommended convertible debt structures might include, for example, instruments with zero coupon bonds, mandatory conversion or conversion on demand from corporate management, and limitations on transferability of conversion rights.