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Gold/Mining/Energy : International Precious Metals (IPMCF) -- Ignore unavailable to you. Want to Upgrade?

To: kimberley who wrote (26577)	11/15/1997 10:11:00 PM
From: Bob Markley	Respond to of 35569

<< What is a redeemable convertible note? >> Kim, From my Canadian Securities Course book (replace bond/debenture with note): Convertible debentures combine certain advantages of a bond with the option of exchanging the bond for common shares. In effect, a covertible bond gives you a call at a specified price on the common shares of the company. Convertible debentures (or bonds) possess a special right to be exchanged into common shares on specifically determined terms called the 'conversion privilege'. They possess the characteristics of bonds or debentures inasmuch as they carry a fixed interest rate and a definate date upon which the principal must be repaid. They offer possibilities of capital appreciation through the right to convert the debentures or bonds into common shares at the holder's option at stated prices over stated periods. A Forced Conversion Clause This is an innovation built into certain convertible debt issues to give the issuing company more scope in calling in the debt for redemption under certain circumstances and hence "forcing" the conversion if this is more advantageous for the holder to do. Such a redemption provision usually states that once the market price of the common stock (involved in the conversion) exceeds a specified level and trades at or above this level for a specific number of consecutive trading days, the company can call the bonds for redemption at a stipulated price. LoveSippingCaRedWineAndGettingHardToTypeBob

To: kimberley who wrote (26577)	11/15/1997 10:46:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 35569

Kim: Redeemable means the company can pay the debt before conversion to stock. I am not sure why if the conversion price is variable. Therefore one must assume that the conversion price is fixed at 125% of a price of the stocksometime in the next few weeks, otherwise they sould not be able to "draw down" on that debt by the end of the month-fundamental, Dear Watson<G>). The company assumes that by the time the bond will be submitted to conversion the stock will much higher than 125% of the price on fixing day, and thus it might make sense to make a PP or another type of offering at muvh higher prices and redeem the debt rather than let it convert at a lower price. I, for one would like to see them draw down that line by the end of the month. Zeev