merrill lynch very lucky, page-3

Lg ... for the holders/investors in the convertible debenture (commonly for an added 'real' optionality), they can excercise a right (sometimes with an attached fee) to convert their debt on a fixed ratio (commonly) into ordinary equity. If they do so, there are either fixed periods or set conversion dates for a predetermined price; this would be calculated on an agreed formula b/ween the isssuer (NDO) and holder (MLI). There are quite a few reasons for holding such a bond, most of which relating to the holder gaining access to potential value of the issuer that the holder would otherwise be unable to participate in (i.e., only 1st-way receipt of cashflow/coupons). Also, NDO may have received more favourable costs/terms on the isssue for attaching the right for MRI to convert. IMO, it shows MLI may have had a longer-term, investment oriented view of NDO, and may be prepared to buy equity rather than simply take a creditor position. I'm not sure how the 8c would be calc'd, you'd have to see the terms of agreement for that one; commonly at a discount to the weighted-avg of x-days of trade, etc.