I think it needs to be made clear is that the notes are basically debt instruments issued at par with a coupon of 6.5%...the carrot for investors/lenders is the convertability to equity in the future, and at a premium to current market. The convertability does not mean that investors/lenders are paying a premium for the equity, they just have the future option to convert the debt to equity if they desire. Typically, these instruments are split (in secondary market trades) into their constituent parts via synthetic contracts ie. the debt element is transferred to other parties at its market value, while the investor retains the equity option.
The fundamental fact is that equity is not being bought today at a premium.
regards DF
AED Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
