How do the coupon rate and the yield-to-maturity rate of a convertible bond differ?

The coupon rate is the rate of interest paid at set intervals while you hold the bond, whereas the yield-to-maturity rate (guaranteed yield to maturity) is the annual yield guaranteed if you hold the bond to maturity without exercising the conversion right.

When the yield-to-maturity rate is set higher than the coupon rate, the amount corresponding to the difference is usually paid on top of the principal at redemption (a redemption premium). KOFIA guidelines likewise calculate the bond value of mezzanine securities based on contract terms such as the coupon rate, the guaranteed yield to maturity and the interest payment frequency, and in either case you can receive the payments only if the issuer remains able to repay.