Bonds, Interest Rates & Exchange Rates

How do bonds with warrants (BWs) and convertible bonds (CBs) differ as bonds?

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With a convertible bond, exercising the conversion right turns the bond into shares, and the bond is extinguished.

With a bond with warrants, exercising the right to buy new shares (the warrant) extinguishes only the warrant portion; the bond itself remains outstanding and in effect until maturity. As a result, BW investors can expect both bond interest and gains from a rise in the share price, but they also continue to bear the issuer's credit risk until maturity.

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This answer is general financial information as of 14-10-2026, not investment advice. Rules and tax rates change, so please also check the latest guidance from the source institution.