The issuer assigns dates for this provision, after which the bondholders may then redeem the bonds. Convertibility is the option of converting a bond into stock. Bonds with this feature are called convertible bonds. They give the investor the option to convert the bond into the issuing company's stock, usually the company's common stock. Conversion must occur at specified times, at specified prices and under specified conditions set in writing at the time of issue.
Bonds can be callable and convertible in one.
With this provision, the company may have the option to pay investors in stock. Mortgage bonds are backed by mortgages on specific assets or physical property of the company issuing them. Equipment trust certificates are certificates that offer equipment as backing. Railroads and airlines commonly use them. Zero coupon bonds are bonds that do not pay periodic interest but are sold at a discount to make up for the lack of interest payments.