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Bond with warrants

Bond with warrants

A bond with warrants is a loan where the debt instrument carries warrants to subscribe for new shares.

What is a bond with warrants?

A bond with warrants (Swedish: optionslån) is a loan a limited company raises through debt instruments with a right to subscribe for new shares. The right takes the form of warrants, which can often be detached and transferred separately.

 

A bond with warrants and the share ledger

When the right is exercised, new shares are subscribed at the set subscription price, and the new owner is entered in the share ledger. Outstanding warrants belong in the cap table as they can cause dilution.

Record options
Henrik Kristensen, NVR
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Related terms

Warrant

A warrant gives the right to subscribe for new shares in a company at a set price.

Convertible

A convertible is a loan that can be exchanged for shares in the company.

Debenture issue

A debenture issue means a company borrows money by issuing bonds or debentures to investors.

Dilution

Dilution means existing owners' stake in the company decreases when new shares are issued.