"In relation to Centro Properties the banks will convert $1...

"In relation to Centro Properties the banks will convert $1 billion in debt into hybrid securities with a maturity of seven years. These are convertible in seven years with all interest payable on them capitalised."

"The convertible bonds will not be able to be turned into equity without shareholder approval. That is in keeping with ASX listing rules."

Can someone elaborate on the above comments?

Ie : when bonds are converted to equity, do they take on market price?