“Convertible -debt/note/bond/debentures” which of these are the same or different?
They all basically mean the same thing - a type of debt than can be exchanged for (converted into) equity at some point. It's only the mechanics that can be different. A convertible bond is structured just like a regular bond - it (usually) pays periodic interest and has a face value that's due at maturity. The difference is that the bond holder has the option to exchange the debt for equity at some point during the life of the bond.  There can be restrictions on when that conversion is possible, and they typically define a quantity of equity (number of shares) that the bond can be converted into.  If the market price of the shares goes above a price that would make the shares more valuable than the bond, it's in the best interest of the bond holder to convert. A convertible note is typically used to describe a kind of startup financing that does not pay interest or have a face value that's redeemed, but instead is redeemed for equity as part of a later financing round.  Rather than specifying a specific number of shares, the bond holder receives equity at a certain discount to the rest of the market. So they both are debt instruments that can turn into equity investments, just through different mechanisms. A debenture is a fancy word for unsecured debt, and convertible debt could be used to described either structure above, so those terms could mean either type of structure.
Could be misunderstanding your context. But ev = equity + debt - cash. So don't think it makes sense for an equity holder to have an individual ev/ebitda different from the company's.   Are you asking in context of valuing equity and debt from an ev/ebitda multiple? "By protected you mean what exactly? In the US, generally you'd get a promissory note signed by B saying ""B promises to repay A such and such amount on such and such terms"". In case of default you can sue in a court of law, and the promissory note will be the evidence for your case. In case of B declaring bankruptcy, you'd submit the promissory note to the bankruptcy court to get in line with all the other creditors. Similarly in all the rest of the world, you make a contract, you enforce the contract in courts." If I hold a bond then I have a debt asset. If I hold physical silver then I have a commodity asset. If I hold the stock of an individual company then I have an equity asset. Equities, commodities and debts are the three kinds of assets that a person can hold.  Edit: I forgot one other kind of asset; monetary asset. If I stuff my mattress with cash (USD) I am holding a monetary asset.  Short-term Treasury Bills really behave more like a monetary asset than a bond. So besides actual, physical, currency I would categorize T-bill as a monetary asset.  https://www.treasurydirect.gov/indiv/products/prod_tbills_glance.htm "In theory, the term of the bond does not affect the priority.  It does not matter whether a ""Junior Subordinated Debenture"" is due in one year or sixty, it is still lower priority than a ""Secured Note"".  On the other hand, if the ""Secured Note"" is secured by something that is not worth as much as the note, the excess is an unsecured debt. In practice, the term of the bond has two effects: Short term debt holders are more likely to get out just before the company goes broke.  Sometimes their efforts to get out are exactly what causes the company to go broke!  (""Commercial paper"" is even more fickle than banks.) All other things being equal, and depending on the terms of the loan, some bonds get priority over bonds of the same type that are issued later.  For example, your first mortgage usually takes precedence over your second mortgage." "Mortgage is a (secured) debt, a combination of a promissory note, and a security interest providing the mortage holder a secured interest in the property. Yes, you are ""in debt"". But that depends upon whether you define the term ""in debt"" as a debt appearing on the balance sheet, or the net of assets - liabilities is less than zero, whether you have a ""debt"" expense on the income statement (budget), or whether the net of income - expenses is less than zero. One person might look at their budget, find the (monthly) mortgage payment listed, and judge that they have a debt payment, and thus are ""in debt"". Or they might look at their expenses, find they exceed their income, and judge that they are ""in debt"". Another person might look at their balance sheet, compare assets to liabilities, and only say they were ""in debt"" when their liabilities exceeded their assets. Some people view mortgage debt as ""good debt"", as they view certain debts as ""good"" and others as ""bad"". Trust me, having a high mortgage payment (higher 30% of your net income) is hard, and over 40% is bad. Consider you balance sheet and your income statement.  On your balance sheet, the house appears on the ""asset"" side with an (estimated) value, while the ""mortgage"" (really, the promissory note part of the mortgage) appears on the ""liability"" side. On your income statement, your house does not appear on the income side, but the mortgage (promissory note) payment appears on the expense side. So, you clearly have both a ""liability"" with a clearly-defined value and an ""expense"" with a clearly-defined payment. But do you have an ""asset""? According to an accountant, you have an ""asset"" and a ""liability"". But you do not have a business asset that is producing revenue (income), nor do you have a business asset that can be amortized and expensed to reduce taxable income. When we think about an asset, does the word have the connotation of some thing with value, something that produces income?  Well, by that measure, a house only provides income when we rent it out, and only has value when we consider selling it. As millions of families discovered during the housing (price) collapse, when the market price of your ""asset"" falls substantially, your personal financial status can fall negative and you can be ""broke""." "You are asking multiple questions here, pieces of which may have been addressed in other questions.  A bond (I'm using US Government bonds in this example, and making the 'zero risk of default' assumption) will be priced based on today's interest rate. This is true whether it's a 10% bond with 10 years left (say rates were 10% on the 30 yr bond 20 years ago) a 2% bond with 10 years, or a new 3% 10 year bond.  The rate I use above is the 'coupon' rate, i.e. the amount the bond will pay each year in interest. What's the same for each bond is called the ""Yield to Maturity."" The price adjusts, by the market, so the return over the next ten years is the same.  A bond fund simply contains a mix of bonds, but in aggregate, has a yield as well as a duration, the time-and-interest-weighted maturity.  When rates rise, the bond fund will drop in value based on this factor (duration). Does this begin to answer your question?" "The word ""good"" was used in contrast to ""bad"" but these words are misused here.  There are three kinds of debt: Debt for spending. Never go into debt to buy consumables, go out for a good time, for vacations, or other purchases with no lasting financial value. Debt for depreciating assets, such as cars and sometimes things like furniture. There are those who put this in the same category as the first, but I know many people who can budget a car payment and pay it off during the life of the car. In a sense, they are renting their car and paying interest while doing so. Debt for appreciating, money-making assets. Mortgage and student loans are both often put into the good category. The house is the one purchase that, in theory, provides an immediate return. You know what it saves you on the rent. You know what it costs you, after tax. If someone pays 20% of their income toward their fixed rate mortgage, and they'd otherwise be paying 25% to rent, and long term the house will keep up with inflation, it's not bad in the sense that they need to aggressively get rid of it. Student loans are riskier in that the return is not at all guaranteed. I think that one has to be careful not to graduate with such a loan burden that they start their life under a black cloud. Paying 10% of your income for 10 years is pretty crazy, but some are in that position. Finally, some people consider all debt as bad debt, live beneath their means to be debt free as soon as they can, and avoid borrowing money." At the heart of this issue is an accounting disagreement that BIS has with current accounting standards.  So basically, foreign investors want to invest in lucrative American Dollar investment products but they don't want to have to buy American Dollars in order to do so because of foreign exchange risk (the risk that by the time your investment is realized, any gains are adversely effected by the change in currency values). So instead, they trade in a series of (currency) swaps that allow them to mitigate that foreign exchange risk. In doing so, they are only required by current accounting standards to record such transactions at fair value = 0, thus skipping over the balance sheet and only hitting the footnotes. BIS believes these transactions should be recorded at gross values and on the balance sheet as opposed to the footnotes.  The debt is hidden insofar as global dollar debt is calculated using liabilities on balance sheets and not the footnotes. That being said, in no way are these transactions truly hidden as (1) any good analyst values footnotes as much as the financial statements themselves and (2) exposure isn't really the same as debt.  TL:DR BIS (as reputable as they are) wants to change currently accepted accounting standards and screaming $14 TRILLION DOLLARS is their way of doing it. Perhaps something else comes with the bond so it is a convertible security. Buffett's Negative-Interest Issues Sell Well from 2002 would be an example from more than a decade ago: Warren E. Buffett's new negative-interest bonds sold rapidly   yesterday, even after the size of the offering was increased to $400   million from $250 million, with a possible offering of another $100   million to cover overallotments. The new Berkshire Hathaway securities, which were underwritten by   Goldman, Sachs at the suggestion of Mr. Buffett, Berkshire's chairman   and chief executive, pay 3 percent annual interest. But they are   coupled with five-year warrants to buy Berkshire stock at $89,585, a   15 percent premium to Berkshire's stock price Tuesday of $77,900. To   maintain the warrant, an investor is required to pay 3.75 percent each   year. That provides a net negative rate of 0.75 percent. The 1 month and 1 year columns show the percentage change over that period. Coupon (coupon rate) is the amount of interest paid on the bond each period (as specified on the coupon itself. Price is the normalised price of the bond; the price of taking a position of $100 worth of the principal in the bond. Yield is the interest rate that you would receive by buying at that price (this is the inverse of the price). The time is the time of the quote presented. Two parties will agree to pay each other's interest obligations. This is generally for one of two reasons:   * One party wishes to swap a fixed interest rate (eg coupons on a bond) for a floating interest rate (eg: payments on a loan). If their counterparty wishes the opposite, and the rates are acceptable to both, they will agree to swap their obligations  * There are two firms, based in countries A and B. Each firm has a branch in the other's country, and these branches each have a loan, denominated in that other countries currency. To reduce each firm's exposure to FX risk, they can swap their obligations, so A will pay interest on B's loan (which is in A's currency) and B on A's loan (which is in B's currency).  edit: removed infuriating unterminated bracket. In the strictest sense, there are bills,notes, and bonds, named when issued based on their time to maturity. Even though it's called a bond ETF it may have a duration short enough to be made of T-bills, less than a year to maturity.  Simply put, for bonds, risk comes from the duration, time to maturity. "The term ""stock"" here refers to a static number as contrasted to flows, e.g. population vs. population growth. Stock, in this context, is not at all related to an equity instrument.  Yes, annual refinance costs, interest rate payments etc. are what we should be looking at when assessing debt burden. Those are flows. That was my point when cautioning against naive debt GDP comparisons.  Also, keep in mind that by borrowing in it's sovereign currency, the US has an enormous amount of monetary tools to handle the debt if it ever became a problem. Greece, by comparison, is at the mercy of the ECB, so they only have fiscal levers to pull. The interest expense does not strike me as especially concerning, but I'd be happy to verify BIS or IMF reports if you would like." "There are normally three key factors that define different kinds of loans, these factors affect the risk that the lender takes on and so the interest rate. The interest rate on any loan is linked to market interest rates; the lender shouldn't be able to receive a higher rate of interest for lending the money at no risk, and the level of risk that the lender believes the borrower to have. The three features of a particular loan are: These reduce the risk of complete or total non-payment (default) of the principal or any missed interest payments. Taken in order: Amortising Here some of the monthly payment pays a proportion of the underlying principal of the loan. This reduces the amount outstanding and so reduces the capacity for default on the full principal as part of the principal has already been paid. Security In a secured loan there is an asset such as a car, house, boat, gold, shares etc. that has a value on resale that is held against the loan. The lender may repossess the security if the borrower defaults and recover their money that way. This also acts as a ""stick"" using the loss of property to convince the borrower that it is better to keep paying the interest. The future value of the security will be taken into account when deciding how much this reduces the interest rate. Guarantor A guarantor to a loan guarantees that the borrower will repay the loan and interest in full and, if the borrower does not fulfil that obligation, the lender is able to seek legal redress from the guarantor for the borrower's debts. Each of these reduce the risk of the loan as detailed and so reduce the interest rate. The interest rate, then, is made up of three parts; the market interest rate (m) plus the interest rate premium for the borrower's own credit worthiness (c) minus the value of the features of the loan that help to reduce risk (l). The interest rate of the loan (r) is categorised as: r = m + c - l. Credit ratings themselves are an inexact science and even when two lenders are looking at the same credit score for the same person they will give a different interest rate premium. This is mostly for business reasons, and the shape of their loan book, that are too tedious to go through here. All in all the different types of loan give flexibility at the cost of a different interest rate. If you don't want the chance of your car being repossessed you don't take a secured loan, if you have a family member who can help and doesn't mind taking on your risk take a guaranteed loan." When individuals take on a loan, it's often in the form of a mortgage, right? And companies take out business loans all the time, only they might be a regular bank loan and not in the form of buying bonds, more similar to when an individual takes a loan.  I was seeing through what process a firm would have to go through in order to get funding via the bond process.